The pandemic, inflation and Liz Truss had a significant bearing on the north’s property market during 2023.
Northern Ireland actually started the year with the first fall in house prices in three years.
The official house price index found the average property dipped 0.5% to £175,234 between the end of 2022 and start of the year.
It followed the chaos in the financial sector following the disastrous mini-budget in September 2022 that sounded the death knell for Liz Truss’ short-lived stint as UK Prime Minister and sent mortgage rates rocketing.
The result was a slump in market activity, with HMRC’s data showing the lowest number of first half year residential transactions in the north since 2015.
Yet the activity picked up as the mortgage market stabilised and demand resumed.
The competition for a dwindling housing stock in the north, pushed prices back up as the year wore on.
By the third quarter, the official house price index put the average home at £179,530, 3.1% up from the second quarter and 2.1% up over the year.
Inflation and the surging cost of materials appeared to hit the house building sector, with a slump in the number of new homes both started and completed.
The number of new houses started in the first nine months of 2023 was 21.7% down on the same period last year and 25.5% below the same period in 2019.
A total of 3,889 dwellings were completed in the past three quarters, which was 22.5% down on last year and 1,573 (29%) down on 2019.
The commercial property market
In the commercial sector, the major investment was diverted into large retail schemes and student accommodation, particularly in Belfast.
Market analysis suggests around £320m was invested in commercial property deals this year.
The biggest retail deal of the year was the £46.5m purchase of Rushmere Shopping Centre in Craigavon by Killahoey Limited, led by DV8 founder Ian McMahon.
The sale of Forestside to Michael and Lesley Herbert also grabbed the headlines in September.
The couple paid around £42m for the South Belfast shopping complex.
Local investors also stepped in to buy Derry’s Foyleside in September, with Derry-based Patrick and Edmund Simpson leading a consortium.
Abbey Retail Park in Newtownabbey was also snapped up this by Californian investment trust Realty Income, who paid £40.6m.
But in terms of new builds, the collapse of the office market post-pandemic saw investors pump significant funds into new build student accommodation in Belfast.
At the end of 2022, Ulster University and Queen’s University told Belfast City Council that student accommodation in both purpose built and in the private rental sector was at capacity in the city.
Their representatives told the council that the city needed a further 6,000 rooms for students by 2028-30.
Investors responded this year, launching proposals for multiple large scale schemes.
As building continued around Ulster University’s new York Street campus in the city centre, investors turned their attention to the area between Queen’s University and the city centre.
By the end of 2023, there were at least half a dozen projects at various stages of development along the Dublin Road and former stretch of Belfast, once labelled ‘the golden mile’.
