Feb 23 2021 04:44:00
Kernan Property Services Annual Sales Review 2020
By Aaron Kernan
23rd of February 2021
The latest House Price Index statistics released by the Land and Property Services this week has provided some interesting statistics for the Northern Ireland property market for Q4 2020.
We’ve analysed the figures in more detail reflecting on how the Newry, Mourne & Down sector has performed individually, providing a greater insight for both current and future clients.
The Covid-19 pandemic essentially placed the housing market on hold last March. The numbers of sales for Q1 2020 were not adversely affected as the lockdown commenced in the last week of March. However, due to government restrictions imposed throughout lockdown the number of sales recorded for April - June 2020 greatly reduced.
Between Q4 2019 and Q4 2020 the House Price Index has increased by 5.3%. A continuation of the trend which has seen an increase of 106% in the average quarterly sales since the first quarter of 2011.
House prices in all council areas showed an increase over the 12 months between Q4 2019 and Q4 2020, with our district of Newry, Mourne and Down showing and increased percentage of 8.9% during this time. Placing our district 4th of the 11 boroughs surveyed.
At present, the current average house price in Newry & Mourne is £159,305 some 3.6% higher than the average house value in Northern Ireland.
What is happening to house prices during the third lockdown?
At the beginning of lockdown in March of last year, it was very difficult to forecast the impact of the coronavirus situation on the housing market while branches were closed.
However, what we do know is that the housing market in NI was in good shape going into the crisis. With house prices increasing by 5.3% over the past 12 months we now know that there is still remarkable demand from those still wishing to buy.
Lockdown has been a Pause, not a Crash.
N.Ireland house prices had peaked in the third quarter of 2007 but had fallen by as much as 53% in the five years after.
Northern Ireland had the most embarrassing hyper-inflation in house prices in 2005-2006, worse than anywhere else in the UK and Ireland.
The current increase in house prices has been much more gradual with Northern Ireland growing by just 19.3% in the last decade. A recently published report Nationwide Building Society confirmed house prices here grew by 23% in the 1980s, then by 115% in the 1990s and by 123% in the 2000s.
The fact that buyer demand is now running even higher, and coming off the back of an exceptionally busy second half of 2020, indicates how many homeowners are still using lockdown as a spur to reassess how and where they are living.
The rebound in buyer demand is broadly even across all regions and countries, showing that a cohort of homeowners in all areas are deciding that with new commuting patterns, changing working trends and potentially more time being spent in their homes throughout the year, they would like to live somewhere else, or in a larger home.
The ‘search for space’ has been a key trend in the market over the last year - resulting in the price of houses rising twice as quickly as the price of flats.
The steady level of growth over the past 10 years was not a cause for disappointment, particularly for those struggling to get on the property ladder. I would take a more positive spin on this.
If you put it into context, we had a massive decline after the crash at the beginning of the last decade until things turned around in 2014. There has been steady growth since.
House prices had been on a "crazy road" over the last 15-20 years but they are much more reliable and predictable now.
We had phenomenal growth in the 2000s and then a massive crash. Things are much more consistent now and it makes for decent affordability.
The potential for growth in 2021 and beyond in the North of Ireland is promising. Consensus forecasts suggest the N.Ireland economy will experience one of the fastest rates of growth on records through 2021 – expanding in the 5-6% range.
Low mortgage rates have also helped to keep people's monthly mortgage repayments relatively affordable in the North of Ireland. The average interest rates for new mortgages have fallen from around 5% in 2009 to 2.0% currently.
Average Interest Rates in N.Ireland
2011 – 5%
2020 – 2.0%
Average Houses Sold in N.Ireland since January 2011
Since 2011 across the North of Ireland an average 4,524 properties have sold in the first quarter each year.
In January 2011 2,401 sold
In January 2015 4,616 sold
January 2020 shows that 4,955 changed hands, showing an increase of 106% over the 10 years previous.
Average House Prices in N.Ireland since 2011:
NI:
2011 – £119,024
2015 - £110,940
2020 - £147,593
Showing an increase of 19.3% over the 10 years previous.
UK:
2020 - £249,633
Showing an increase of 7.6% of the 12 months previous.
R.O.I:
2020 – €269,000
Showing an increase of 7.4% of the 12 months previous. Up 64% from its lowest point in early 2013.