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New evidence of recovery in Northern Ireland housing market

There is fresh evidence that a recovery in the Northern Ireland housing market
is under way.

The Royal Institution of Chartered Surveyors (RICS) said its latest market
survey for the province was more positive that at any stage since July 2007.

The monthly survey sponsored by the Ulster Bank pointed to levels of agreed
sales continuing to rise and an ongoing stabilisation of prices.

The bank’s mortgage chief said it believes the vast majority of the house
price “correction” had now been completed.

Institution housing spokesman Tom McClelland said: “The RICS housing market
survey has been reporting increasing transaction volumes for some months now
and this has since been reinforced by other surveys of the local market.”

However he cautioned: “Whilst encouraging, this should be kept in perspective,
as this has been from very low levels. There is still some way to go before
they reach what would generally be considered normal.”

The survey indicated that estate agents expect sales levels to increase again
in the next three months.

“It will be interesting to see whether this is boosted by a rush to purchase
before stamp duty threshold is due to return to £125,000 from £175,000 at
the year end,” said Mr McClelland.

He added: “With regard to prices, this latest data adds to growing evidence
that prices have been stabilising. Surveyors expect this trend to continue
in the months ahead.”

But he said it was important to point out that there were large variations in
the market and different property types and different areas may have had
significantly varying experiences.

In the longer term there were a number of other factors which could hit the
market, including the reduction in government spending and potentially toxic
asset sales by the Irish government’s NAMA, he warned.

The net balance of surveyors reporting that agreed sales increased in the last
three months was 70%, up from 45% the previous month.

The net balance reporting sales would rise rather than fall in the next three
months was 50%.

Meanwhile the survey’s price balance improved to -18 from -20 and -45 in the
previous two surveys. In mid 2007 it was at zero and fell to -90 before
starting the climb back.

The price balance is achieved by combining the agents why say prices were
rising, those – the vast majority – who said they were stable – and the
small number who said they were still falling.

The price expectation balance, at 10%, is at its most optimistic since June
2007.