HOUSE prices in Northern Ireland continued to fall in the first three months of 2023, new analysis from Ulster University shows.
The university’s quarterly house price index, produced with the NI Housing Executive and Progressive Building Society, detected a ‘cooling’ in the market, with house buying down 31 per cent on the same period last year.
The index said the price of the average home fell 0.7 per cent to £203,326 between the final quarter of 2022 and first three months of 2023.
While prices are still higher than they were a year earlier, Ulster University said the erosion of real incomes coupled with increased mortgage costs for both first time buyers and existing homeowners is impacting the market in 2023.
But despite consumer confidence taking a hit, the report concludes that the waning supply of housing stock, particularly in areas of high demand, means the market is unlikely to experience “severe price correction”.
Ulster University’s latest index was based on 2,590 transactions recorded in the first quarter (Q1) of 2023, a drop of 31 per cent from Q1 2022.
The index uses a different methodology than the official government measure, and hence traditionally tracks prices at a higher rate.
The official house price index produced by Northern Ireland Statistics and Research Agency (Nisra) put the average house price at £175,234 in the final quarter of 2022.
The ‘unweighted’ price data contained the university’s latest index suggests house prices fell by £4,000 in the last quarter.
While there was little change in the price of semi-detached houses (£190,698) and apartments (158,621) over the quarter, the average detached home dropped by £7,000 (2.4 per cent) to £285,677.
Ulster University identified the Causeway Coast & Glens as the most expensive place to buy in Q1 2023 (£252,248), with Derry & Strabane (£160,164) the cheapest.
The biggest quarterly drop in price was recorded in Ards & North Down (-8.7 per cent), followed by Belfast (-6.5 per cent), while Fermanagh & Omagh (17.3 per cent) and Mid Ulster (7.8 per cent) saw the biggest increases.
Lead researcher Dr Michael McCord said the latest index reflected the first fall in prices since the onset of Covid-19.
“Despite this nominal decline, the market has remained steady, although it continues to face mounting and continued headwinds.
“Annual inflation has not declined to expected levels resulting in interest rates reaching a 15-year high further squeezing the incomes of those on tracker or standard variable rate mortgages.”
Ursula McAnulty, head of research at the NI Housing Executive, which commissions the research, said: “Many challenges, including interest rates and inflation, remain for purchasers, and we are unlikely to see a significant lessening of these challenges in the short to medium term.
“Despite this, the ongoing housing supply constraints will temper the impact on house prices, with this stability in the housing market likely to remain for the rest of 2023.”
