Glimmer ofstability in localhousing market

It shows the average house price in the city is now £174,018, an increase over the quarter and over the year suggesting some confidence may be returning to the local market.

While the authors have cautioned that most of this growth appears to have been on the back of a strong detached house sector with an average sale price of £276,200, they also noted that while the market varied considerably across Northern Ireland there were lower declines and evidence of stability in some areas within Belfast and the Greater Belfast Metropolitan Area commuter belt as well as Lisburn.

The overall average price in Lisburn increased by 5.9% over the last year, though terraced/townhouses at £76,590 and semi-detached houses £139,272 are lower.

The other good news is that the survey has produced evidence of a significant increase in sales in the first quarter of this year.

The Index, which is produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, showed the number of transactions recorded by 110 estate agents between January and March rose to 925 compared to only 684 in the last quarter of 2010.

The overall average price of a house in Northern Ireland in the first quarter was £143,918, a decrease of over 15% on the same time a year ago. This figure is particularly influenced by the volume of sales in the sub-£150,000 market with two-thirds of all sales falling into this bracket.

The authors of the report - Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton – said the survey showed the local housing market was still in a state of flux.

They said: “As demand levels consolidate it is likely that prices will start to firm up later in the year.”

Referring to the annual decline of more than 15% in prices, the authors said that stronger conditions had prevailed in the first quarter of 2010 prior to the UK general election. Since then, they said, the housing market had had to operate within a different economic, fiscal and policy context.

Alan Bridle, UK Economist with the Bank of Ireland, said: “While there is no certainty we have yet reached the absolute trough, it is clear the residential market is now more affordable and more aligned to incomes. However, the outlook for the remainder of 2011 is likely to remain challenging against the broader economic canvas with budgetary pressures on public, private and household sectors and the mortgage industry adjusting to new regulatory realities. More positively, the pressure for immediate interest rate rises has dissipated”

The Housing Executive’s Head of Research, Joe Frey, added: “The upturn in the number of transactions is a welcome step in the process of normalisation of Northern Ireland’s housing market, and is hopefully the first sign that the downward drift in house prices is coming to an end. However, it is important that we do not provide an overly optimistic view of short-term developments. It is important that we re-build buyer confidence on the basis of sound research and analysis”.

mary.magee@ulsterstar.co.uk