House prices in Northern Ireland rise by almost 10%

The average house price in Northern Ireland rose by almost 10 per cent in the second quarter compared with the same time last year, according to Ulster University (UU).

The housing market also recorded the highest volume of transactions since 2005.

The Northern Ireland Quarterly House Price Index, which is produced by UU in partnership with the Northern Ireland Housing Executive (NIHE) and Progressive Building Society, was published on Tuesday.

It analyses the performance of the North’s housing market during the second quarter of 2021 (April, May and June).

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The report found the overall average price of a house in Northern Ireland is now £195,242 (€229,760) – the highest figure since autumn 2008 – which represents a weighted annual level of growth of 9.2 per cent between the second quarters in 2020 and 2021.

Figures in the second quarter increased by 2.8 per cent compared with the first quarter of 2021.

Transactions

In total there were 4,138 transactions in the second quarter, which was “substantially” higher than the 2,829 reported in the first quarter and the 570 in the second quarter of 2020, when the market was closed for most of the quarter due to Covid-19.

The report noted that the “psychological effect of the Covid-19 pandemic upon the housing market is well and truly discernible, with the race for space clearly evident”.

The trend towards “increased competition amongst buyers, with viewings instantaneously translating into firm offers and trading up activity” which was noted in the first quarter of 2021 has “firmly continued,” its authors said.

More than 70 per cent of estate agents surveyed said they had experienced “increasing demand” for property in more rural locations compared with the previous quarter, and many purchasers had been influenced by the prospect of working from home.

“Purchasers from outside Northern Ireland continue to be a key feature of the market this quarter, with buyers from England, Scotland and Wales often seeking to return ‘home’ and take advantage of remote-working possibilities,” the report noted.

Across Northern Ireland’s 11 local government districts, seven districts demonstrated “moderate and large price increases” between the first and second quarters of the year, while the remaining four demonstrated “small to modest” price decline.

The greatest increase was in Mid Ulster, where the average house price rose by 15 per cent to £198,378, while in Antrim and Newtownabbey the average price fell by 5.7 per cent, to £207,646. The lowest average house price is in Derry city and Strabane, at £123,525.

Variations

The report said this geographic variation was in line with previous surveys and was “representative of local market demand and supply factors and market behaviour.”

Elma Newberry, the assistant director of land and regeneration with NIHE, said the end of the full stamp-duty holiday on June 30th coupled with “lifestyle shifts” for many due to Covid-19 had resulted in a “flurry of transactions” in Q2 “as households relocated, often to larger properties and – in some cases – different areas.

“In part, therefore, it seems that the upward trend in average house prices reflects the size of properties transacting, as purchasers have sought additional space.”

Availability of suitable properties has also been a “challenge, and the indications are that this will continue to be the case”.

She said about half of estate agents who provided feedback to the survey expected further price increases over the coming months.