Housing outlook darkens as jobless figures soar

The latest Rics/Ulster Bank residential market survey says housing demand remained strong in October
Gary McDonald Business Editor

DESPITE chartered surveyors continuing to bullishly talk up the north's housing market, there remain fears that the outlook is darkening as jobless numbers continue to soar.

The latest Rics/Ulster Bank residential market survey says demand remained strong in October, with anecdotal evidence pointing to some buoyancy within the sector.

But most key indicators have eased back from their higher levels in September, and surveyors admit there is a more challenging period ahead.

It comes amid a generally worsening economic outlook, with latest labour market data pointing to a potential 30,000 redundancies in the north as a result of the economic impact of coronavirus, and the official unemployment rate crept up to 3.6 per cent over the July to September quarter.

The Rics report says two in five of its respondents in Northern Ireland saw house prices rising in October (down from 78 per cent in September).

They had around half of new-buyer enquiries in October from the previous month, though newly-agreed sales and instructions to sell, while easing back, remained relatively strong.

Looking ahead, a quarter of respondents expect prices to rise over the next three months while just 16 per cent expect sales activity to increase in the next three months.

“The stamp duty holiday has acted to encourage more buyers, and a good supply of property coming on to the market has also supported sales activity,” according to Samuel Dickey, RICS residential property spokesman.

“As we head deep into winter, demand will likely ease off for now, and next year much will depend on the labour market, government support for the economy, as well as lending conditions.

“But positive developments with a vaccine have given hope for life getting back to a greater degree of normality, and with that the outlook for the economy should improve.”

Ulster Bank's head of personal banking Terry Robb added: “The third quarter was extremely busy for mortgage activity, and this continued into October with good demand from the full spectrum of borrowers. We remain strongly committed to supporting people to buy their own home, move house or remortgage.”

Simon Rubinsohn, UK chief economist for Rics, said: “There is increasing concern that the combination of significant job losses over the coming month allied to the scaling back of policy initiatives in early 2021 will have an adverse impact on transaction levels.

“There is little sense this softer sales picture will be accompanied by very much easing in the momentum around prices and rents, adding to the ongoing challenge around affordability.”

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