Demand for houses in Northern Ireland on decline but market remains stable overall

Data collected by Ulster University shows that demand for property is weakening.

Interest rate uncertainty has resulted in potential buyers being hesitant in purchasing property, according to new research from Ulster University.

The latest House Price Index showed that the market remained stable, but overall demand has weakened along with buyer enquiries and new listings coming onto the market.

Overall average house prices in the third quarter of 2023 were around £205,545, an increase of 2.4% compared to the previous quarter and a 4.7% increase relative to this time last year.

The price of detached property stood at £299,400, semi-detached properties cost around £195,228, terrace or townhouse-style properties collected on average £137,272; while apartments cost £158,172 on average.

Dr Michael McCord from Ulster University, said: “The housing market continues to remain resilient despite the ongoing volatile economic setting, interest rate and mortgage lending environments.

"House prices showed a small increase in the third quarter of the year invariably due to underpinning microeconomic market fundamentals – namely the lack of supply, which continues help prop prices up.

"There are signals of weakening demand however with noticeable reductions in new listings and buyer enquires as consumer confidence wanes and potential buyers hit the pause button to see where interests go over the next few quarters.

"This is reflected in mortgage lending statistics which show approval rates down 30% in September.

"Market evidence does nonetheless indicate that lenders believe that interest rates may have peaked with a number of providers repricing mortgage deals more cheaply.

"The belief that the turbid market setting may be settling is very much dependent on announcements relating to upcoming inflation statistics, whether the Bank of England maintain current interest rates, and if the UK enters into a recession.

"In such a dynamic market setting, the tables could turn at any moment, especially with the ongoing conflict in the Ukraine and the conflict between Israel and Hamas.”

Head of Research at NI Housing Executive, Ursula McAnulty, said the data showed that "prices have been more or less stable for around two years in spite of the wider economic context and higher borrowing costs, and this suggests ongoing demand".

"However, there is a growing sense of pressure and structural difficulty in the local housing system as households struggle to find and sustain suitable, affordable accommodation, irrespective of tenure," she added.

Michael Boyd, Chief Executive, Progressive Building Society said "the tight supply picture is undoubtedly providing underlying support and looks likely to continuing doing so in the near future, as is the recent pause in interest rate hikes by the Bank of England".

"However, headwinds persist in the form of worries that further interest rate rises may be on the horizon and signs the wider economy may be weakening. The future direction for the market will be dependent on these competing factors," he added.

Average house by council area:Antrim and Newtownabbey: £190,811Ards and North Down: £231,201Armagh City, Banbridge & Craigavon: £189,831Belfast: £190,115Causeway Coast & Glens: £214,278Derry City & Strabane: £154,525Fermanagh & Omagh: £172,522 Lisburn & Castlereagh: £237,472Mid & East Antrim: £178,040 Mid Ulster: £193,819Newry Mourne & Down: £222,092

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