NI Housing Recession Over?

The last two years of house price freefall may be over.

Normally cautious estate agents are reporting increasing levels of inquiries now being translated into sales.

While this is just anecdotal evidence from several estate agents, it comes as part of a fuller, more comprehensive report from the University of Ulster that seems to point to a end to the house price recession.

The university report said that while Northern Ireland price tags continued to decline over the last quarter, it is at a much slower rate than before.

The key property price survey, known as the University of Ulster index, showed that between April and June the value of homes in the Province declined by 0.5%, significantly less than at the beginning of the year.

The authors of the study said that an increase in sales transactions appeared to be evidence of a stabilising market.

However, the fall has been dramatic with prices now 40% down from the 2007 peak.

The average price of a house in the second quarter was £158,886, ranging from £119,165 in the cheapest area, Craigavon/Armagh, to £200,805 in the most expensive, South Belfast.

The survey, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, said: "The volume of housing transactions – a key indicator of recovery – in April, May and June was 950 recorded deals.

"This figure is low relative to normal market conditions but it represents a significant increase compared to recent surveys; 692 in quarter one of 2009 and 704 in the final quarter of 2008."

The report's authors said this was the start of a turnaround in the NI property market as it provides some encouragement that the two year-old housing recession in Northern Ireland may be coming to an end.

The report said there was a "shift towards greater affordability" with 19% of properties selling at or below £100,000.

The majority of houses in the survey (62%) of about 120 estate agents sold at or below £150,000.

The report's authors - Professors Alastair Adair and Stanley McGreal and Louise Brown - said the survey "provides the first tangible evidence that the housing market is starting the process of recovery".

"Transactions, although still below normal market conditions, are up, the rate of price decline is reducing and growth has occurred in some market sectors during the second quarter of 2009," they said.

NI Housing Executive Head of Research Joe Frey is quoted as being cautious however. He said indications that the market was stabilising were welcome, but he warned it was "important to be cautious at this stage".

"First-time buyers are still having to find deposits of 25% and there are still considerable numbers of unsold new properties on the market," he said.

"There is still some way to go before a more balanced market emerges."

(BMcC/KMcA)