The staggering decline in house prices in Northern Ireland is persistent, with west of the Bann the worst off, according to a Government index.
The Land and Property Services, of the Department for Finance and Personnel, state that residential property prices dropped by 11% in the year to June 2012.
Between April and June they fell by 3%, leaving the area with an average house price of £95,623.
The residential property price index uses stamp duty records to document house prices and includes repossessions and auction sales in its findings.
A spokesperson for the index says that following a peak in house prices in 2007, they have declined by 53%.
“Since the third quarter of 2007 [the index] has fallen initially sharply, albeit with prices stabilising in 2009 and the first half of 2010.
“Since 2010, prices have continued to fall but at a less marked rate of decline.”
Additionally, in quarter 3 (Q3) of 2011, only 253 houses were sold, compared to 387 in the same quarter of the previous year. The average selling price of a National House Building Council (NHBC) registered new home was £152,900 in Q3 2011, which shows a 9.3% fall, on the same period in 2010. In financial terms, this is a drop of £15,600.
The average cost of a property in Northern Ireland in Q3 2006 stood at £159,900, compared to the peak quarter between April and June of 2007, when the average price was £216,400.
Currently, the average house price in the south and west of Northern Ireland is £84,893
Richard McCulloch, of Stanley Best Estate Agents in Magherafelt, Co Londonderry, says that the south and west are experiencing significant declines: “West of the Bann has traditionally achieved lower asking prices, which reflects the realities of moving further away from Belfast where all the public sector jobs are.”
He claims that sales are happening at the lower end of the market, and with prices lower, people are not committing to large mortgages.
“Gone are the days that first time buyers set out with a noose around their neck in the form of a high mortgage,” he says.1
Economist John Simpson noted that it would be “excitable” to imply that Northern Ireland had gone through the worst property crash in the world.
He explains: “Northern Ireland had the most embarrassing hyper-inflation in house prices in 2005-6, worse than anywhere else in these islands.
“We are now living with the consequences of that, and many people are having to get used to the idea of being in negative equity over the next 20 years.”1
Professor Alistair Adair continues: “It’s one of the biggest crashes in these islands, but Spain has also experience a massive decline.”1
Average prices are presently 7% less than Q1 2005, but more transactions are now taking place.
There were 2,962 sales in Q2 2012, which is 11% higher than the same period last year.
Richard Ramsey, Ulster Bank’s chief economist, says: “By region, the steepest decline was within the west and south of Northern Ireland
“This region saw [the index] post a quarterly fall of 10% in the second quarter of 2012 and is 17% lower over the year.
“Since its property price peak, prices have fallen by 55%.”1