Demand for houses easing across Northern Ireland however housing shortage still keeping prices high

Generic Stock shot GV house housing roof sky residential market street living chimney Northern Ireland
Credit: UTV
A net balance of 84% of respondents reported a rise in house prices over the past three months. Credit: UTV

Demand for houses is easing across Northern Ireland however a housing shortage is still keeping prices high.

That's according to the latest Royal Institution of Chartered Surveyors (RICS) and Ulster Bank Residential Market Survey.

Growth in new homebuyer demand in Northern Ireland stalled in July and the new buyer enquiries balance moved into negative territory for the first time since June 2020.

However, as has been the case for many months, limited stock in Northern Ireland's residential market continued into the second half of 2022.

With this, house prices are still on the rise with a net balance of 84% of respondents reporting a rise in house prices over the past quarter.

A net balance of 21% are also expecting house prices to rise over the next three months.

Of course, net balance data is opinion based and does not quantify actual changes in an underlying variable.

A positive net balance implies that more respondents are seeing increases than decreases while a negative net balance implies that more respondents are seeing decreases than increases.

The price expectations balance is now at its lowest since September 2020 reflecting a more cautious outlook due to higher interest rates and a weakening economic landscape.

Still, a net balance of 25% of respondents expect sales to increase over the next three months - down slightly from the previous month where a net balance of 32% of respondents expected a rise in sales.

Samuel Dickey, RICS Northern Ireland Residential Property Spokesman, said: "The demand for property of all types is still outstripping supply. The rental market also continues to be strong.

"However, it isn't surprising to see some cooling in the market which has been so buoyant for some time.

"We will likely see the higher interest rates and the cost of living continue to have some impact on demand in the coming months.

"But it is likely that the lack of supply will continue to be the main factor in the market."

Terry Robb, Head of Personal Banking at Ulster Bank, added: "Mortgage demand remains relatively good, and interest rates are still at low levels by historic standards.

"Our expectation is that there will continue to be good demand from homebuyers in Northern Ireland.

"The biggest influence on the market continues to be the low levels of supply of properties available for potential buyers to choose from.

"With regard to existing mortgage customers, nine in ten of our mortgage accounts are on a fixed rate as rising interest rates are encouraging customers to secure a new fixed rate deal to bring some certainty at this time."

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know.