Business

Why your house value is still on the up . . .

house prices
The UU index showed that the average property price in the north increased by 0.4% in the third quarter of 2023 to £207,010 (William - stock.adobe.com)
By Gary McDonald

The north’s housing market is continuing to show “optimism and resilience” as prices continue to edge high, an index has revealed.

The closely-watched quarterly house price index for October to December, produced by Ulster University in partnership with the NI Housing Executive and Progressive Building Society, showed that the average property price in the region increased by 0.4% over the period to £207,010.

It says the stability of the interest rate, albeit at 5.25%, is seemingly paving the way for more attractive mortgage deals.

But the research shows signs of slowing market activity, with transactions at their lowest level over the year, decreasing 26% on the previous quarter.

Overall, it says that despite the ongoing economic challenges across 2023, including higher interest rates and the cost-of-living pressures, the overall housing market in the north continued to show price resilience and stability in the fourth quarter.

Among the key market trends from the report were:

  • The terrace/townhouse sector exhibited the highest price growth of 1.6% with terrace dwellings averaging £125,738 and townhouses £190,845
  • The detached sector observed growth of 1.1% and the average price now £302,717
  • Semi-detached houses remain the most common property type comprising 36% of all transactions with an average price of £195,780
  • The apartments sector displayed a decrease of 1.7% and the average price stands at £155,452

Dr Michael McCord, reader in real estate valuation and lead researcher, said: “The housing market continued to display nominal growth in the last quarter of 2023 of 0.4%, and ongoing price stability and resilience against the wavering economic and political backdrop.

House prices
Details from the UU index (Gary)

“But there were clear signs of a slowdown in buyer enquiries and a reduction in sales transactions over the quarter, a trend which was evident across the entirety of 2023 as potential buyers weathered the volatile interest rate and mortgage interest rate movements.

“The end of 2023, and beginning of 2024, has seen a more settled interest rate environment which has transcended into the mortgage market with lenders beginning to reduce rates and provide more attractive deals.

“With the direction of travel for interest rates arguably on a downward trend throughout 2024, allied with reducing inflation, the housing market should exhibit increased buoyancy within the first half of 2024.”

Ursula McAnulty, head of research with the Housing Executive, which commissions the research, said: “Despite a challenging economic environment in 2023, house prices in Northern Ireland have maintained stability, with a modest 0.4% increase from Q3 2023 to Q4 2023, and an annual weighted price increase of 2.9% in comparison to Q4 2022.

“This strong end to 2023 in terms of pricing levels is likely to continue into 2024, with the vast majority of agents predicting consistent pricing structures into the new year.

House prices
Details from the UU index (Gary)

“The restoration of a devolved government in Northern Ireland should provide for a more stable political environment, and we look forward to continue working with partners across the housing field.” 

Michael Boyd, chief executive of Progressive Building Society, added: “While facing a number of headwinds, the local housing market once again posted a resilient performance in the last quarter of 2023, highlighting a strong demand and supply picture.

“Despite both quarterly and annual gains, there is little doubt borrowers remain under pressure in the face of continued cost-of-living pressures linked to recent inflationary pressures and a still-high interest rate environment.

“But while transaction volumes have waned, a lack of new supply is likely to underpin house prices in the coming months. In addition, the sharp slide in inflation in recent months and moribund interest rate environment are likely to offer further support, as is the boost to sentiment from the resumption of the Executive at Stormont.”