General Market Trends

The main finding of this survey is that some sectors of the market have experienced highly significant reductions in price level though the overall picture suggests that the drop in house prices is not as severe as expected. While the average price is lower, the weighted rate of decline compared to the second quarter of 2007 is only 4% and over the quarter the weighted decline has been marginal, 0.6%. The main impact is on the volume of transactions with these halved over the course of the year reflecting the problem that buyers have in raising mortgage finance.

The overall average price of residential property in Northern Ireland for the second quarter of 2008 is £226,934 which equates to a weighted decline of 4% compared with the second quarter of 2007. This is the first significant annual fall in the index and represents a total transformation of the housing market from one year previous when, in comparison, a growth rate of 51% was reported. Such a dramatic change in market sentiment is unprecedented and highlights the problem occurring globally with the credit crunch and mortgage markets. While these statistics indicate that a correction is taking place in the market, it is important to stress that price levels have not collapsed and that the marking down of property prices appears to be incremental rather than a one-off correction.

The survey indicates a further improvement in relative affordability with 25% of all transactions for property selling for at or less than £150,000 compared to 23%, 18% and 9% respectively in the previous surveys, though the percentage of sales within the £150,000 to £200,000 has dropped back to 25%. In total 68% of the transactions in this survey were for properties below £250,000. The market-share for higher priced properties has been relatively unaffected with 32% of sales in excess of £250,000 and 10% above £350,000.

For this survey, the market share taken by terraced/townhouses (n=276) is 26% with semi-detached houses (n=221) representing 21%. Both of these property types have a lower representation in this survey. Detached houses constitute 15% (n=154) and detached bungalows 7% (n=71). Semi-detached bungalows 2% (n=24) are again poorly represented and have the smallest market share. Apartments have a greatly increased market share than the previous survey (n=298, 29%). With the relatively small sample size, newly developed property again constitutes an inflated share (50%) of the sample due to the low volume of second hand transactions. Of the new build sector 47% are apartments, the strong performance of which has offset reductions in other sectors of the market.