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No 'fast fix' for NI house prices

Wednesday, March 10, 2010

Source: Catherine Deshayes

There is no hope for a 'fast fix' in the NI housing market as the local economy faces a slow, uneven recovery, chartered surveyors have warned.

The February survey from the Royal Institution of Chartered Surveyors showed an improvement in house prices. But RICS Northern Ireland housing spokesman Tom McClelland said recovery was slow. He said the number of houses being bought and sold was up - but marginally - and levels were far from normal.

He further added: "The housing market, like the economy, is in recovery mode. However, like the economy, recovery in the housing market is going to be slow. Housing transaction levels, which are the most important factor in the housing market recovery, are rising, but at a marginal rate, and are still a long way off what you could call normal levels.

'Sluggish'

"In terms of prices, there continues to be some movement, but we anticipate that average house prices will be broadly flat over the course of the next couple of years. However, there will be variations and there are risks."

Mr McClelland said the slow rate of change would probably continue, given that economic growth was sluggish and significant challenges such as public sector spending cuts lie on the horizon.

Derek Wilson, head of lending products at Ulster Bank which sponsors the survey, said anyone hoping for strong price growth in the near future would probably be disappointed.

"It will be encouraging for those seeking to purchase a home that the market is moving increasingly away from what were abnormal market conditions and into a period of greater stability," he said.

A net balance of 30% of Northern Ireland chartered surveyors reported rising transaction levels in the February survey. A net balance of 70% said they expected transaction levels to rise further over the next three months.

In terms of prices, 60% reported that they have remained the same over the past three months, with 5% saying they had risen and 36% reporting a downturn.

Source: www.bbc.co.uk