Houses for Sale and Rent at PropertyNews.com

February 2010

• This latest snapshot of the residential market broadly mirrors that for the local economy as a whole – recession is coming to an end, there is tentative evidence of recovery in some parts but activity levels remain significantly below the peaks of 2006 & 2007.

• The last 12 months have been marked by some signs of stabilisation although the general climate remains challenging. After the excessive and volatile swings of previous years, the parameters for price movements narrowed during 2009 and we may anticipate a similar pattern during 2010.

• Q4 2009 saw the average price overall soften slightly again to c £161,000, representing a decline from peak (Q3 2007) of over 35%. However, on an annual basis, the rate of price deflation has moderated to c7%.

• The sub-regions are again characterised by uneven performance with some locations reporting that prices are actually higher than for the same period in 2008.

• On the annual comparison, the report indicates that detached properties have held their value overall while the evidence of lower price points is most marked in the apartment sector.

• The encouraging note sounded by this bulletin is the increase in the sample number of deals in the final quarter of 2009, recording a two year high, in what is traditionally a quiet season for the market.

• First Time Buyers in Northern Ireland now have a scenario of lower mortgages, higher deposits and significantly, lower debt-servicing costs with interest payments as a percentage of income now back at pre-boom levels of around 14%.

• A number of factors, both macro and micro that will influence the local housing market over the next 12 months. The end of recession will be declared but recovery is likely to be slow. Mortgage lending may continue to improve slowly but steadily if liquidity pressures ease and as banks and building societies rebuild balance sheets.

• Unlike other parts of the UK, there is little evidence of a supply squeeze in the local market - while house completions in the region during 2009 are at near record lows, it is still likely that Northern Ireland is working off the residual from a period of excess supply of new private stock during 2004-2006.

• The rate of housebuilding should accelerate again during 2010 but without the same inflationary consequences.

• Overall, steady progress in activity levels may be the most likely scenario for 2010 but the risks to average prices are still to the downside in my view and a move closer to the £150,000 level as the year unfolds.