Property in Northern Ireland Update

Summary: An update on the state of the property market in Northern Ireland following record price growth and interest rate rises

It was interesting to read two very different perspectives in the British media this week of the path that property in Northern Ireland has taken so far in 2007 and year on year to the end of June 2007.  On the one hand The Independent newspaper ran with the headline ‘Northern Ireland House Prices Surge’, and on the other hand The Guardian newspaper ran with ‘Housing Cools in Red Hot Northern Ireland.’

This is our property in Northern Ireland update so that you can get to the facts and the heart of the matter and see whether the Northern Irish property market bubble has actually burst as one headline insinuates or whether there’s still life in the market even in spite of another interest rate rise.

For the facts on which The Independent article was based the journalist in question referred to the latest housing market findings from the Department for Communities and Local Government, whereas the author of The Guardian article took their inspiration from a report produced by the Royal Institution of Chartered Surveyors and the Ulster Bank.

Looked at side by side you then have seemingly divergent facts and figures such as almost half the chartered surveyors questioned reporting that house price growth has all but died and that house prices in Northern Ireland have risen over 50% in the year to date. 

But if you delve a little deeper you actually see that both reports are painting the same picture and presenting the same facts but that they are just doing it from a glass half empty or a glass half full approach!

So, yes it is true that the housing market in Northern Ireland was one of the most buoyant and booming of the UK housing markets between May 2006 and May 2007.  Real median house price growth topped between 40 and 51.9% in that period with houses coming to the market, offers being accepted at up to 25% over the asking price and the deals being closed within days during that period.

Then following the rapid rise in property in Ireland prices that has seen some areas of Belfast on a par with London for property prices and which has seen the median price of a property in the province catch right up with the UK norm there came a series of interest rate rises one after the other and a withdrawal from the market of investment by property investors.  Investors sold up and shipped out to less inflated real estate markets and all of a sudden, almost over night everything has ground right down in terms of market movement in Northern Ireland.

Property price inflation has seemingly topped out, properties are taking longer to sell and are selling on their asking price rather than well above and consumers are well aware of affordability risks they may face if they move house and upgrade because of the government’s interest rate rise offensive.

In other words, the housing market in Northern Ireland has caught up with the rest of the UK and is now in a similar position so the boom is most certainly over – at least for the time being.

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