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Northern Ireland housing market continues to outperform rest of UK

NORTHERN Ireland’s housing market continues to do significantly better than other UK regions across all indicators, the latest Royal Institution of Chartered Surveyors (Rics) study has found.

House prices in Britain – including in London and the south east – fell for the third successive month in November, with uncertainty over Brexit prompting home buyers and sellers to sit tight in increasing numbers.

But Northern Ireland is at the other end of the spectrum, with more than a third of surveyor respondents saying prices rose.

And on future expectations for house prices, the north is the only region of the UK where surveyors expect prices to rise in the three months ahead.

Respondent are also significantly more optimistic than elsewhere in the UK when it comes to expectations for sales activity.

But supply remains an issue, with a lack of new homes up for sale impacting estate agents’ average stock levels.

Samuel Dickey, residential property spokesman at Rics said: “Overall 2018 is shaping up to have been a relatively positive year for the local housing market in a number of respects.

“House prices have risen at healthy rate and activity in various segments of the market has been relatively good, albeit that there are regional variations.

“But we need to see more new homes being built, and more resale properties would need to become available to meet demand. Uncertainty in the wider environment doesn’t seem to be having an significant impact on the housing market to date in Northern Ireland, unlike in the rest of the UK, though whether that continues into 2019 remains to be seen.”

Terry Robb, head of personal banking at Ulster Bank, which assists Rics in the publication of the monthly report, said: “Demand this to date has been good and we have seen a good pipeline of activity during the year. Feedback suggests that the early part of 2019 at least will see these trends continue.”

It now takes 19 weeks on average for a property to sell after initially being listed, the longest duration seen since this aspect of the survey started in February 2017 and another sign of challenges in the sales market, Rics said.

In the lettings market, demand from prospective tenants is holding broadly steady, but the number of new homes coming up for rent continues to fall, signalling a continued decline in the supply of fresh rental stock.

On average, rents are expected to rise by 3.1 per cent a year over the next five years, while house price growth projections stand at 2.3 per cent on the same basis, Rics added.

Source: Irish News

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Buoyant local housing market bucks the UK trend

HOUSE prices in the north have bucked the UK trend, with an increase reported last month, new figures show. Northern Ireland is the UK’s most buoyant housing market according to the RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Residential Market Survey.

While UK prices dipped last month, surveyors in the north reported ongoing growth.

A net balance of 55 percent of local respondents said that house prices increased – the highest of all UK regions.

Local surveyors are also the most optimistic about the future, with a net balance of 35 per cent expecting prices to rise in the next months and 30 per cent predicting a boost in sales in the same timeframe.

By comparison most other regions expect prices and sales activity to fall or be broadly flat in the final quarter of the year.

There was a slight fall in newly agreed sales month-on-month, but there was an increase in new buyer enquiries, according to the survey.

In terms of supply, the survey pointed to a slight rise in properties coming onto the market in Northern Ireland for the first time in five months.

RICS residential property spokesman, Samuel Dickey said there is considerable positivity to be found from the latest figures.

“Interest from first time buyers and a strong rental have been two of the factors driving the Northern Ireland housing market, with first time buyers and investors both very active this year.”

“Surveyors remain confident about the market, despite political and economic uncertainty, and 2018 is shaping up to have been a more positive picture for the housing market than perhaps was initially anticipated,” Mr Dickey said.

Terry Robb, head of personal banking at Ulster Bank added:

“As the survey indicates, demand remains relatively strong and we continue to see a good-pipeline of mortgage applications. Our new paperless mortgage process has generated interest, but more fundamentally, interest in the market remains firm from a broad range of mortgage purchasers including first time buyers, home movers and those remortgaging.”

Source: Irish News

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Northern Ireland set to enjoy strongest UK house prices growth

NORTHERN Ireland is set to enjoy the strongest growth in house prices in the UK over the next four years, with residential property prices predicted to lift from their current average value of around £128,000 to reach £154,000, according to PwC’s latest UK Economic Outlook (UKEO).

The report points to the local market being more resilient than the rest of the UK, where there will be some softening of national property price growth between now and 2022.

Data on annual property price growth reveals thatNorthern Ireland is currently the seventh highest among the UK regions, with PwC forecasting the region will rise to third in 2019 and will top the list by 2022.

But even if prices do increase at this rate, they will still be around 28 per cent lower than the 2007 pre-recession average.

The UKEO says the the Northern Ireland economy is set to growth by a mere 0.8 per cent in 2018 and around 1.2 per cent next year – still well below the forecast UK average of 1.3 per cent and 1.6 per cent, making it the slowest-growing of the UK’s 12 regions.

PwC NI chairman and UK head of regions Paul Terrington said: “The Northern Ireland property market continues to perform better than expected, with a positive balance between earnings and house prices. But prices remain well below their peak level in 2007, and this gap is unlikely to close in the near future.

“We have also considered the effect of future interest rate rises, and believe that only around 11 per cent of UK households would be immediately affected if rates increased.”

The PwC report also highlights the impact that artificial intelligence (AI) may have on UK employment in the two decades to 2037 and, while estimates suggest the overall net effect will be broadly neutral, this is not true for individual sectors.

The most positive effect is seen in the health and social work sector, where PwC expects the number of jobs to increase by nearly one million, equivalent to around 20 per cent of existing jobs in this sector.

On the other hand, the report estimates that the number of jobs in the manufacturing sector could be reduced by around 25 per cent due to AI and related technologies, representing a net loss of nearly 700,000 jobs.

Applying this formula across the UK regions suggests that the impact on Northern Ireland will be broadly neutral, amounting to a net loss of around 4,000 jobs by 2037, considerably less than other industrialised regions.

Mr Terrington said the overall outlook for 2019 was mixed, adding: “The UK economy held up well in the six months after the EU referendum, but growth slowed from early 2017 and continued into early 2018, while higher inflation has squeezed real household incomes, which has taken the edge off consumer-led growth.

“The stronger global economy should continue to have some offsetting benefits for net exports this year, although there are downside risks in 2019 and beyond if recent US tariff policy changes were to escalate into a wider international trade war.

“Brexit-related uncertainty and the absence of any UK-EU agreement may also continue to hold back business investment across the UK while the absence of an Executive and the continued uncertainty around post-Brexit border controls impacting inward and indigenous investment and general business confidence.”

He went on: “The next 12 months will be crucial for Northern Ireland’s medium-term growth, but as at today, the signs are not especially hopeful.”

Source: Irish News

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Why sustainability is key to Northern Ireland’s housing market

SINCE the early noughties, the Northern Ireland housing market has been the subject of much discussion and analysis, with the sector going through a period of unprecedented fluctuation particularly between 2006 and 2012.

In the early and mid-2000s, both national and international economic issues resulted in an exponential rise followed by the largest fall in property prices within any global market. The unprecedented property boom of the early 2000s was then counteracted by a significant drop in house prices during the ‘credit crunch’. But since 2013 we’ve seen steady progress and a rebalancing of the housing market.

The quarterly Northern Ireland House Price Index provides the most current analysis of the market, looking specifically at data from the quarter just finished. This data comes from the start of the housing chain, the estate agents, providing a leading indicator. This has enabled us to have a more detailed insight into the trajectory, affordability and sustainably of the market over the last two years and to assess the medium to long term outlook.

Despite political and economic upheaval at a local and national level, Northern Ireland’s housing market has remained resilient, with prices generally on an upward curve since the start of 2016.

But the difference between now and ten years ago is that the growth is based on affordability, sustainability and a robust economic foundation. In the first quarter of 2018 we saw an annual house price increase of 4 per cent and a rise of 3.1 per cent compared with the final quarter of last year.

The consumer squeeze that had been building throughout 2017 eased, with inflation falling against the backdrop of rising wages which boosted spending power for local households.

In Northern Ireland residual incomes are lower than other parts of the UK, which reflects the need to maintain steady, sustainable housing growth. There are signs that increased demand and a shortage of supply has seen an overheating in London and Dublin markets, and therefore the reestablishment of a regional government is essential to ensure that there is a consistent flow of new properties on to the market in Northern Ireland.

Two years ago, there were supply and demand issues in the local market, with the need to strike a balance between the availability of housing and increasing numbers of first time buyers and those wishing to move to a bigger home. With the number of first time buyers currently at its highest level for a decade, this imbalance still hasn’t been fully addressed and it is an area where a collaborative approach between the public and private sector is needed.

Over the last two years there has been an overall house price increase, across all Northern Ireland regions bar one, with the average cost increasing in that period by 11.7 per cent (from £146,472 to £163,621).

Growth within the regions generally appears to be clustered, with properties in areas of close proximity generally having similar levels of growth in average prices. East Belfast is the exception, and has experienced a much larger growth rate of 13 per cent (£22,515) than the rest of the city.

The largest overall increase has been seen in Lisburn at 26.4 per cent, closely followed by Derry/Strabane at 24 per cent, despite a 6.2 per cent decrease in from 2017, and East Antrim at 23.3 per cent.

The only region in Northern Ireland to witness a marked decline in average house prices over the last two years was Coleraine, Limavady & the North Coast. Average prices in this area have declined by 7.4 per cent from £147,108 in the first quarter of 2016 to £136,270 in 2017 quarter four, though it did however recover at the start of this year, noting an average house price of £156,365 during this time.

In the first quarter of this year Northern Ireland led house price growth across the UK with a 7.9 per cent increase on 2017. Unemployment is now at a 10-year low, and with inflation falling and wages starting to rise, property prices here remain more affordable than many other regions.

But political and economic uncertainties remain, and clarity around Brexit, as well as a re-established Stormont, would enable us to maintain long term sustainable growth in the sector.

With continued confidence among estate agents and the wider industry, the outlook is positive for our housing market for the remainder of 2018 and beyond. Improved housing supply and prudent lending will be key elements in ensuring this growth is sustainable in the longer term.

Source: Irish News