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The latest Quarterly House Price Index report from Ulster University indicates a stable residential property market that continues to exhibit increasing price growth and strong market demand signals.
The University research, which has been produced in partnership with the Northern Ireland Housing Executive and Progressive Building Society, analyses the performance of the Northern Ireland housing market during the fourth quarter of 2020 (October, November and December).
The report reveals an overall average house price of £183,944, which represents a weighted annual level of growth of 2.8% between Q4 2019 and Q4 2020. When considering quarterly movements, the Index displays an increase of 2.3% relative to Q3 2020. This growth appears to be driven by the increased activity particularly in the semi-detached and new build sectors across the province. The volume of transactions in the survey is 2,630.
75% of the Estate Agents surveyed confirmed an increase in transaction activity from the previous quarter. Increased viewing levels overall has translated into an increase in agreed sales over the course of the quarter with a significant percentage (81%) of agents reporting a direct correlation between the level of viewings and agreed sales.
The survey suggests agents expect market sentiment to remain positive with all respondents citing levels of confidence amongst both buyers and sellers to either improve or remain the same over the first three months of 2021.
The distribution of sale price this quarter shows some notable movements. The proportion of lower priced properties (below £100,000) equated to 14.9%, a decrease of one percentage point from Q3 2020. Properties sold at or below £150,000 accounted for 42% of transactions, a further four percentage point decrease compared to 46% observed in the previous survey.
In the mid-to-higher price brackets, 69% of transactions were at or below £200,000, representing a two percentage point decrease from the previous quarter. In the upper pricing levels of the market, 83% of properties sold at or below £250,000, the same as the previous quarter, while 89% of sales were below the £300,000 price band, a decrease of one percentage point by comparison with the previous quarter.
Overall, the analysis by price band shows a decrease in the sales of properties resting in the lower end of the price distribution, with the discernible increase in activity in the mid-value ranges of the pricing structure across Northern Ireland continuing to show trading up occurring within the market.
Lead Researcher, Dr Michael McCord, Reader in Real Estate, Ulster University said:
“The price statistics are based upon market evidence as the housing market continues to function during the waves of the global pandemic and ongoing national and regional imposed lockdowns. We reported in the last quarter that there has been a psychological impact upon the housing market with buyers and sellers re-evaluating their housing options, noting a discernible trend in buyers trading up within the market. This trend appears to have continued into the fourth quarter of the year. As the vaccination programmes roll out and support packages and measures are slowly withdrawn and the housing market becomes more interlinked with the economy, the ‘truer’ and real implications of the global pandemic will emerge.”
Michael Boyd, Deputy Chief Executive and Finance Director, Progressive Building Society, said:
“As we continued to navigate through different levels of lockdowns, the buoyancy within the Northern Ireland housing market that we witnessed in Q3 has continued in the last quarter of 2020 with a quarterly price rise of 2.4% and an annual increase of 2.8%. The positive analysis by the Bank of England of a strong recovery in 2021 is encouraging, and that impetus at a national level will require, not only political stability but, strong political leadership at a local level to ensure we build economic momentum, supporting job creation to enable consumer spending. At Progressive we are committed to offering a flexible approach and are continually reviewing the market to ensure that we can provide the guidance and support that buyers are looking for.”
Ailbhe Hickey, Acting Assistant Director of Land and Regeneration with the Housing Executive, said:
“At a time of so much uncertainty, the relative stability of the housing market in the second half of 2020 was encouraging. The longer term outlook will depend mainly on what happens in relation to coronavirus restrictions and the associated economic impacts. The housing market has been insulated, to some extent, from the impacts of job losses and reduced incomes, but any major change in policy around mitigations like the furlough scheme could leave some households in challenging circumstances.”
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