Northern Ireland House Prices see continued growth, however a ‘mortgage bomb’ may be on the way due to the latest budget announcements

Northern Ireland’s housing market continued to grow through the third quarter of 2024, revealing high levels of consumer confidence and market activity.

Marking the 40^th year of the House Price Index produced by Ulster University, the latest Northern Ireland Quarterly House Price Index Report (NIQHPIR) highlights strong buyer demand against a limited supply, driving up the average house price to £219,110 — a quarterly increase of 3.4% and a 5.7% rise compared to Q3 2023. 

Transaction activity remained strong, with 65% of agents reporting a rise in sales completions from the previous quarter. The upward trend in demand appears to be influenced by a shift toward higher-value properties, with transactions of homes priced over £300,000 increasing by 12% year-over-year. In contrast, the share of sales for homes under £150,000 dropped by 3%, with homes below £100,000 now making up only 9% of transactions, underlining affordability challenges for lower-income buyers. 

The Northern Ireland Quarterly House Price Index continues to deliver in-depth insights into the housing market, thanks to research by Ulster University in partnership with the Northern Ireland Housing Executive and Progressive Building Society. This specific report analyses the performance of the Northern Ireland housing market during the third quarter of 2024 (July, August and September). 

Performance by Property Type 

Analysis by property type shows upward price movements across the market sectors during the quarter. Research shows the terrace/townhouse sector of the market had the most significant price increase quarterly by 4.6%, and annually with an increase of 8.2%, meaning an average price of £150,836. Detached properties displayed a price growth of 3.6% with an average price now £325,641. Prices for semi-detached homes grew 3.3% showing an average price of £200,323. Apartments observed price growth of 4.1% with an average price of £162,709. Overall, the annual rate of price change exhibits an unweighted increase of 5.8% compared to Q3 2023 levels. 

The first half of 2024 saw a steady, strengthening housing market in Northern Ireland, as consumer confidence rose, and mortgage rates became more competitive following the inflationary crisis and high borrowing costs of 2022 and 2023. This renewed confidence led to higher mortgage approvals and increased house prices. However, the recent change in government and the latest budgetary announcements will have some market players concerned. In the wake of the budget, major lenders will be reviewing their mortgage offers and particularly rates due to worries about national debt and increased government borrowing, which could impact borrowing costs and housing market activity through the end of 2024 and into 2025. The increase in Stamp duty Land Tax on second homeowners may impact upon market activity and pricing levels in particular regions of the province. Other proposed tax changes by the finance minister at Stormont, namely, to lift the cap on the rateable value for domestic properties in 2025 will also have an impact upon housing market activity levels and pricing, if successful.  

Introducing the findings, Dr Michael McCord, Reader in valuation, investment and finance at Ulster University, and lead researcher stated:   

 “The housing market continues to see strong demand and price growth over Q3 2024 as it navigates its way through the changing political and economic landscape. Market activity across the year has remained buoyant and the reduction of new listings and ongoing lack of supply within the market will continue to help prop up house prices as we enter the final quarter of the year. However, the latest budgetary announcement will invariably have an impact upon housing market activity as these latest fiscal and tax changes start to take effect. The upward movement in bond yields in light of the announcements has the markets unsettled, and government may have underestimated the markets desire to absorb more sovereign debt issuance which undoubtedly curtail any immanent interest rate cuts and may result in lenders increasing their mortgage interest rates”. 

Ursula McAnulty, Head of Research at the Housing Executive, which commissions the analysis, said:   

 “House prices continue to increase in Q3 2024, with a 5.7% annual increase and a 3.4% quarterly increase.  Alongside price increases, there were increased buyer enquiries, market sales and completions over the quarter relative to this time last year.  This growing momentum may, however, be tempered by the signals of impending budgetary and fiscal changes.  These changes will inevitably have an effect on market activity over the last 3 months of 2024.  That said, agents remain relatively positive, with over 85% commenting house prices would remain at their current levels or increase over the remainder of 2024, citing low housing supply as the principal reason.” 

Michael Boyd, Chief Executive of Progressive Building Society, said:  

“With buyers gaining confidence from a more favourably borrowing environment and more positive economic outlook, it is perhaps not surprising that house prices in Northern Ireland continued their upward trajectory in the third quarter of 2024. Combined with the tight supply picture which has become a feature of the local market, it looks as if prices will remain supported for the rest of the year, although much will depend on the interest rate environment in the wake of what can be described as a landmark Budget by the Westminster government.” 

Read the full report findings: Ulster University House Price Index Q3 2024