House prices in Northern Ireland are far outstripping those in the rest of the UK, a quarterly trends index by online portal PropertyPal shows.
In the final three months of last year, the average property price (excluding new homes) stood at £203,100, which is up 0.6% over the quarter.
That’s an annual increase of 4.2%, which is broadly in line with the Nationwide index, pointed to growth of 4.5% for Northern Ireland, compared to an overall UK wide fall of 2%.
The Fermanagh & Omagh area saw the largest annual increase of 7.5%, with the average property there now £172,200.
The report also pointed to rental market pressures in Northern Ireland remaining at highly elevated levels, with an average 75 enquiries per advertised rental on PropertyPal over the last three months, compared to a more typical 20 per property seen pre-Covid
The index says average rents in the north are now £830 a month, which is around 10% higher than 2022 levels, though there is evidence of supply beginning to rise and demand gradually cooling as rent levels increase.
Jordan Buchanan, chief operating officer at PropertyPal, said: “Last year ended more robustly than expected given the challenging economic conditions in the opening half of the year.
“For most of 2023, inflation was close to double digit territory, economic growth was muted and successive base rate hikes pushed mortgage rates to over 5-6%. Despite this, newly agreed sales increased by 16% against fourth quarter 2022 levels, highlighting the underlying positive sentiment still prevailing in the market.
“Furthermore, demand - as measured by enquiries sent to estate agents for their listed properties - is 30% higher than last year and the average time to find a buyer is about 10 days faster than the longer term average.”
He added: “Gradually improving inflation levels has created competitiveness in the lending markets, with many mortgage rates sitting in the 4% range. These conditions give some more optimism for a more active market in 2024.
“But it would be careless to think that the full economic implications have been experienced, because with inflation still double the Bank of England target and proving sticky, expect to see rates sitting at higher levels for much of 2024.
“And the Bank also estimates around half of mortgaged households are yet to refinance their deals on the higher rates. As this happens, this disposable income will be sucked out of spending in a consumer driven economy.”
On the rental findings, Mr Buchanan added: “This year may see more activity from the first-time buyers segment as mortgage rates improve and stable labour market conditions with real income growth. Should this materialise, rental demand is expected to moderate and overall rent levels should gradually cool later in the year.”
