Covid-19's dramatic impact on Northern Ireland housing market highlighted in new report
NEW research from Ulster University has highlighted the dramatic impact of Covid-19 on the north's housing market.
Despite a relatively buoyant start to the new year, the introduction of coronavirus lockdown measures toward the end of March resulted in a 23 per cent drop in housing transactions for the quarter.
The average house price also fell by one per cent between the final quarter of 2019 and the first three months of 2020, according to the university's Quarterly House Price Index,
But prices are still around seven per cent up, on a weighted basis, on the same period last year.
The average price of a Northern Ireland residential property was £175,803 in Q1.
According to the research, commissioned by the Housing Executive and the Progressive Building Society, the average cost of an apartment in the north rose by 13.6 per cent over the past year to £149,509, almost twice the average price increase.
There was a wide variation in quarterly price changes between council areas. Average prices increased by 11.3 per cent in Mid and East Antrim, while they fell by 9.6 per cent in Ards and North Down.
But the study concludes that the housing market effectively came to a halt at the end of March.
“Undeniably, the Covid-19 pandemic has profoundly impacted on market activity levels particularly in the later part of the quarter, with transactional activity effectively on hold,” states the report.
It says that following a “buoyant” fourth quarter of 2019, property agents had been anticipating further price growth at the start of 2020, on the back of greater political certainty here.
The report notes that those sentiments proved correct at the start of the quarter, with an increase in the number of enquiries from both purchasers and vendors and new build developments selling out quickly.
It concludes that the long-term implications of the pandemic are still unclear; however, the perception of many agents is that the market is ‘on hold' until daily life regains a semblance of normality.
Lead researcher, Dr Martin Hinch said: “The re-opening of the housing market when it comes should bring with it a revival in terms the delayed transactions from March onwards and the built up enquiries from the lockdown period, however the longer term implications of the anticipated recession are less clear. Unpredictability, it seems, is set to continue for the foreseeable future.”
Head researcher at the Housing Executive, Karly Greene, echoed those sentiments: “We would very much hope that a measured easing of the current restrictions will allow Northern Ireland's economy – including the housing market – to re-open and recover in a safe and sustainable way, but it will likely be some time before we have a true sense of what recent events mean for house prices and the residential property market.”
The Progressive Building Society's finance director Michael Boyd, added: “Continued support through the Government's employee retention scheme, into the Autumn, and other measures to support businesses will be important factors in maintaining transactions and sustainability as agents and valuers seek to reboot transactions in the market.”