Northern Ireland’s property hangover could linger for up to 10 years

Photo: Canadian Pacific

The economist’s UK economic forecastsays that it could be as long as a decade until prices return to the levels seen before the global financial crisis.

Average Northern Ireland prices are expected to grow 4.7 per cent this year and as much as 5.9 per cent in 2016.

Northern Ireland chief economist, Dr Esmond Birnie, says this is expected to slow towards 2020: “Our nominal property price projections for the UK and its regions suggest that it could be at least 2024 before Northern Ireland property prices return to their pre-crisis levels.

“Interest rates are expected to rise during 2015 and this, combined with our proportionally low disposable income and high percentage of negative equity, will represent a substantial call on future workforce earnings.

“Collectively all these factors have contributed to relatively low levels of demand and only as the legacy of the property bubble and the accompanying debt overhang are worked out of the system will we see increasing domestic demand and accelerated recovery.”