HOUSE PRICES have fallen dramatically across Northern Ireland with little hope of recovery in the market in the foreseeable future, an independent survey has reported.
Average property prices are now below £150,000 (€178,000) for the first time in five years and substantially under the peak price of £250,000 (€296,000) achieved more than three years ago.
The University of Ulster NI Quarterly House Price Index, in conjunction with the Bank of Ireland, reported a steep drop-off in the number of completed sales – down to 795 from more than 1,000 in the second quarter. Turnover is now at just one-third of the peak levels recorded in 2003/04.
Bank of Ireland economist Alan Bridle said the North’s property market was “bereft of confidence and momentum”, with the effects of the public spending cuts, fears of public sector job losses and a resulting dip in confidence being cited as contributory factors.
Mr Bridle, the bank’s UK economist, said it remained to be seen whether the main Executive parties could agree a joint budget in response to the Treasury-imposed cuts which would kick-start consumer confidence.
Falls in house prices in Belfast were particularly marked, with averages now around £138,000 – down nearly 22 per cent on this point last year.
Mr Bridle said: “In previous reports we have highlighted a couple of support pillars for the local market even at a time of subdued activity – a certain resilience in the Belfast market offsetting softer data in rural areas like mid-Ulster and west of the Bann in general, and a steady market for higher-value detached properties, sometimes underpinned by a degree of cash-buying.
“This report confirms that neither of these influences has been as prominent or supportive in the last three months.”
Looking to the future, Mr Bridle said the wider economic context suggests the balance of risks for the local market still lies to the downside. “There appears little on the horizon to trigger a revival in confidence soon,” he said.
“Average prices have now fallen by over 40 per cent from peak and, while it may be close, it is unlikely that we have reached the absolute bottom yet.”
The report’s authors said there was little prospect of major changes in British government policy, with so sign of imminent sharp rises in interest rates and with fresh discussions of a new round of quantitative easing, or printing of money.
