º£½ÇÊÓƵ

A tight supply and demand balance has meant the Northern Ireland housing market has once again proved the most resilient of all º£½ÇÊÓƵ regions, according a new report from Halifax.

Average residential property prices in the province in September were down by just 0.2%, or £400, from a year ago and now stands at £184,108. That compares to a fall of 5.7% in England, 3.6% in Wales and 0.8% in Scotland.

All regions have come under pressure in recent months as a result of the cost-of-living crisis and the recent increases in interest rates. However, a lack of new housing stock coming to the market in Northern Ireland, either newly built properties or resale by those moving house, has underpinned the local market and made the recent dip less pronounced.

Perhaps partly behind the relatively modest correction to the steady house price rise since the end of the Covid-19 pandemic is the fact Northern Ireland’s property prices remain the lowest of all º£½ÇÊÓƵ regions.

In Scotland, average house prices are over £15,000 above Northern Ireland’s at £201,594, in Wales they are £30,000 higher at £214,585 and in England prices are more than double at £376,450. On a sub-sector basis, London is the most expensive place in the º£½ÇÊÓƵ to purchase a home at £525,678.

Across the º£½ÇÊÓƵ as a whole, prices fell by 0.4% in September and now stand at £278,601.

Kim Kinnaird, Director, Halifax Mortgages, said the higher cost of borrowing has also tempered activity.

“Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales,” she said. “Borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability. Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market.”

She added that borrowing costs aren’t likely to come down any time soon.

“Many economists and financial markets predict that Base Rate will remain higher for longer, with any significant cuts appearing unlikely until inflation gets closer to the Bank of England’s 2% target,” she said. “Overall, these factors are likely to keep mortgage rates elevated in comparison to recent years, constraining buyer demand and putting downward pressure on house prices into next year.”