Property professionals anticipate dramatic slump in the north's housing market
THE north's housing market will hit a dramatic slump in the next three months, property professionals have said.
PropertyPal's economist Jordan Buchanan has forecast that the number of transactions could fall by 70 per cent in the second quarter of 2020 and potentially more so in the coming weeks.
That sentiment is broadly reflected in a new survey of property professionals released today.
The monthly residential market report from the RICS (Royal Institution of Chartered Surveyors) and Ulster Bank found a sharp swing in sentiment during March.
With the economy in effective lockdown, the vast majority of respondents to the survey said they expect a fall in sales and house prices in the next three months.
New instructions to sell also fell sharply during March, with new buyer enquiries also well down.
Commenting on the findings, RICS spokesman Samuel Dickey said it was difficult to forecast the impact of coronavirus on the housing market beyond the few months ahead.
“Clearly it depends on how long the current restrictions continue. However, what we do know is that the housing market in Northern Ireland was in reasonable shape going into the crisis.”
Jordan Buchanan said modelling from PropertyPal suggests the north's housing market could see a reduction in prices in the short term in the region of 3-5 per cent.
“The UK stock market is pricing in a 12 per cent fall in house prices," he said. "However, in line with the uncertainty, research from Savills projects UK house prices may fall by 5-10 per cent in the short term, whereas Capital Economics suggest a more modest three per cent reduction by the end of the year.”
While he projects the fall won't be as severe in Northern Ireland, the economist said it will depend on the duration of the lockdown.
“Price growth is expected to pick up at stronger rates during the rebound period giving negligible growth over the next 12-month period.”
Ulster Bank's head of personal banking, Terry Robb, said the lender had introduced a series of measures for customers, including mortgage and loan deferrals for up to three months.
“Our focus remains very much on supporting our customers at a time of considerable challenge for many of them,” he said.