Full Report

Northern Ireland Quarterly House Price Index for Q3 2013

This survey analyses the performance of the Northern Ireland housing market during the final quarter of 2013, the months of October, November and December.

The report is concerned with trends and spatial patterns in the housing market drawing comparisons with the fourth quarter of 2012, as a measure of annual change, and with the third quarter of 2013, as an indicator of quarterly change. The report is produced by the University of Ulster in partnership with the Bank of Ireland and the Northern Ireland Housing Executive.

Housing Executive    University of Ulster    

A market best reviewed in segments

Alan Bridle

Alan Bridle
Head of Research
Bank of Ireland
Northern Ireland


February 2014

2014 has commenced with a brighter macroeconomic outlook for the UK, Northern Ireland and Republic of Ireland with a common and key component being the more positive developments in the respective housing markets. For the region, our latest bulletin provides confirmation of a sustained pick-up in activity levels as 2013 progressed and while average prices recorded a modest decline year-on-year, there is evidence of some recovery in the final quarter.

The local economy returned to positive growth in 2013 with a significant change in sentiment from the summer, consistent with a rise in both business and household confidence. With an extended period of low interest rates, greater availability of mortgage credit and falling levels of job insecurity, reflecting more favourable labour market developments, the volume of housing transactions accelerated towards more normal levels during the second half.

As with previous surveys, the Belfast market is again out in front in terms of activity levels and accounted for around 40% of the total volume of sales reported during Q4. Short-term price fluctuations are very much driven by the profile of transactions in each area and as noted in the report, the sale of a larger number of detached properties in West Belfast has had some influence on both annual and quarterly price trends in the capital.

Looking ahead, the market appears to have come into 2014 with a healthy momentum and while the picture in local markets remains highly variable, the overall outlook for prices, transactions and mortgage volumes is relatively positive. The region is unlikely to match the forecasted 6 to 8% price growth for the UK as a whole (skewed by the double-digit % increases for London & South-East) but the backdrop of falling unemployment, improved confidence, the extension of Help-to-Buy and the popularity of Co-Ownership should help underpin average prices over the next 12 months.

Ultimately, the level of interest rates is the key determinant of property price dynamics in the short-run. Accelerating UK growth, in tandem with an unemployment rate declining sharply towards the 7% threshold identified in the BoE’s initial “forward guidance” has triggered further debate on short-term interest rate prospects but our baseline assumption remains “no change” in the 0.5% bank rate until H1 2015. (Currently, forward markets are predicting the first increase in Spring 2015 followed by a series of gradual increases to 3% by early 2018).

Alan Bridle 
Head of Economics & Research 
Bank of Ireland Northern Ireland 
research@boini.com

Performance by Property Type

Although the transaction base has grown, price trends present a more variable picture with prices down on average over the year but up over the quarter.

Annual performance provides a snapshot comparing the current average price with corresponding statistics for the fourth quarter of 2012. As noted in the previous survey, over the annual timescale there is still a legacy of the property market downturn which is gradually being eroded away. Hence, over the year, most property types are recording a slight reduction in average sale price. The terraced/townhouse sector (£83,695) is down by 1.5%, semi-detached houses (£125,265) also by 1.5%, detached houses (£222,675) by 1% and detached bungalows by 2.5% (£153,391). For apartments  (£96,137), the average price is down by 7.2% over the year and  semi-detached bungalows (£88,010), which are taking a diminishing market share, down by 15.9%.

Annual % change and average price

Market SectorAnnual ChangeAverage Price Quarter 4 2013
 
Terraced/townhouse -1.5%
£83,695
Semi-detached house -4.5% £125,265  
Detached house -1.0% £222,675
Semi-detached bungalow -15.9% £88,010
Detached bungalow -2.5% £153,391  
Apartment -7.2% £96,137

Performance by Region

At the regional level, trends are again highly variable. For certain regions, prices and variability of price trends are a function of the previous constrained evidence base.

LocationAverage Price Quarter 4

Northern Ireland - All £132,922
Belfast 
In terms of transaction evidence, the volume of sales for Belfast (686) is significantly up indicating a more buoyant market. However, the overall average price (£136,830) is down by 8.3% over the year and by 3.4% for the quarter, largely due to a lower average price for detached property. The Belfast market is dominated by terraced/townhouses (£87,976) and semi-detached houses (£151,097). For both of these property types average sale price is down over the year by 3.5% but up over the quarter by 1.7% and 6.5% respectively. Apartments (£103,793) similarly are down over the year by 7% but slightly up over the quarter by 4.5%.
Belfast - All £136,830
North Belfast £89,800
South Belfast £170,717
East Belfast £139,370
West Belfast £116,970
Belfast Metropolitan Area 
Within the commuter zone of the Belfast Metropolitan Area a similar picture to the previous survey prevails, the three local markets are characterised by considerable variation in performance with property prices increasing in North Down but generally lower in Lisburn and East Antrim.
For North Down, the overall average price (£204,175) is up substantially over both the annual and quarterly time periods with 17.1% and 4.7% the respective rates of increase.
For Lisburn, the overall average price of £124,379 indicates a further decline in price levels in the local market.
In East Antrim, the overall average price is significantly lower over the year, down by 19.7% to £100,722. Prices by property type reflect the weaker market conditions.

Within the commuter zone of the Belfast Metropolitan Area, the three local markets continue to display contrasting positions.

For North Down, the overall average price (£171,829) is up over both the annual (by 2.5%) and quarterly (by 10.4%) time periods.

For Lisburn, the overall average price (£143,491) is lower following a very strong performance in the local market during the second and third quarters of 2013.

In East Antrim there is a continuation of the market recovery with evidence of stronger price levels.

North Down £171,829
Lisburn £143,491
East Antrim £119,390
North and North West 

The overall picture in the North and North West appears to be one of consolidation as the local markets adjust to improving economic conditions.

For Antrim/Ballymena the overall average price (£118,772) is higher over the quarter by 5.4% though still below the average price for the fourth quarter of 2012 (down by 4.8%).

For the Coleraine/Limavady/North Coast market, the overall average price (£124,361) has strengthened considerably over both the year (by 2.7%) and the quarter (by 8.2%) consolidating upon the improved market conditions noted in the previous survey.

In the Derry/Strabane market, the overall average price (£99,322) while dropping back from the third quarter average is nevertheless up by 14.2% over the year.

L'derry / Strabane £99,322
Antrim / Ballymena £118,772
Coleraine / Limavady / N. Coast £124,361
West 

The two markets in the West of Northern Ireland are still characterised by considerable variability in terms of price levels and trends.

The Mid-Ulster market, average price £106,139, still shows evidence of market uncertainty with a 3.7% increase over the annual time period but with prices dropping back on average by 4.8% over the quarter.

The Enniskillen/Fermanagh/South Tyrone market for this quarter has an average price of £116,828 dropping back from the third quarter figure but still up by 8.2% over the year.

Enniskillen / Fermanagh / S. Tyrone £116,828
Mid Ulster £106,139
South 

In the south of Northern Ireland, the two market areas again demonstrate somewhat differing pricing structures and trends.

For Craigavon/Armagh, the overall average price (£115,002) is up over the year by 3.2% with significant price movement during the last quarter.

For Mid & South Down, the overall average sale price (£125,456) is somewhat lower, down by 5.8% over the year and by 3.3% over the quarter.

Mid & South Down £125,456
Craigavon / Armagh £115,002

Average House Price by Region

The long-term house price index is calculated relative to price levels for each property type at the base quarter for the survey, the final quarter of 1984. The overall index at 486.69 is higher for this survey reflecting the quarterly growth in average prices across the property types.

The pattern of the house price index since its rapid fall during 2008-2010 has been one of uneven performance though trending downwards. This survey marks a slight increase in the index.

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