By Natalie Clarke, Managing Director of Natalie Clarke Residential
Twelve months has passed since the Brexit result and the economy is probably in a better place than many had expected. There are undoubtedly challenges now and even more challenges to come, but apart from perhaps a bit of a pause for thought, the Northern Ireland housing market appears to have sustained a reasonably well performance.
The latest RICS UK Residential Market Survey pointed to momentum continuing to recede, with sales decreasing marginally over the month.
Anecdotal evidence proposes that the decision of an early election may have created an air of uncertainty in the market. The effects of stamp duty changes last year are also still possibly being felt.
However, according to the RICS survey, prices and sales continued to increase with buyer interest continuing to remain strong.
With regards to supply, the number of new instructions to sell increased for the third consecutive month – indeed at the quickest rate in the UK. Yet, this is from a low base, and apprehensions around a scarcity of supply continue, with new buyer enquiries continuing to grow at a quicker rate than instructions to sell. This supply challenge has lingered in Northern Ireland for the past couple of years and has acted to inflate prices.
An acute lack of stock remains a key fact behind prices at this point in time.
The NI Residential Property Price Index believes Northern Ireland’s standardised house price decreased by 0.8% quarter-on-quarter to £124,007 in the first quarter of this year. This follows a marginal rise (+0.2%) in Q4 2016. Regardless of this decline, local house prices are still 4.3% higher than the same quarter a year ago.
The semi-detached market was the only property type not to post quarterly price decreases within the first three months of this year, with prices remaining unaffected. The overall drop in house prices masks a divergence between new residences and the second-hand or existing homes. New dwellings dropped by 4.5% in Q1 but this followed a rise of one-third in just over three years. Meanwhile, existing or resale market prices have been generally flat for the last two quarters, rising by 0.2% in the latest survey.
Northern Ireland’s yearly rate of house price growth has halved from 8.7% in Q4 2014 to 4.3% in Q1 2017. This decline in the rate of growth is almost foreseeable though as the housing recovery continues.
The Council of Mortgage Lenders believes that lending is holding up well, but under the statistics buyers will face mixed fortunes. Customers that are mortgaging and first-time buyers are driving total lending, whilst home movers and the buy to let market continue to face challenges with less properties featuring in the market.
Experts have warned of ‘real tests’ in the property market in 2017 with uncertainty over unemployment, inflation and the wider economy post-Brexit.
We usually see a substantial upsurge of properties becoming available as the year progresses which in turn generates increased market activity. While there have been challenges, the first half of 2017 has been steady and we look forward to seeing what the rest of the year brings.
Natalie Clarke is managing director of Natalie Clarke Residential and a member of the Royal Institution of Chartered Surveyors (RICs)