The latest NI housing statistics, transactions, starts and completions for Q1 2021 were released this morning by NISRA.
Property prices, transactions, starts and completions all rose year-on-year rose in Q1 2021. Estate agents and house builders have experienced a ‘V-shaped’ recovery but how long will the good times last?
Reality check – Inflation has been the buzzword in recent weeks with cost increases and price rises becoming more apparent amongst businesses and households. UK CPI inflation jumped from 0.7% y/y in March to 1.5% y/y in April. That represents the largest monthly increase since 2009. Residential property prices are rising at an even faster pace and have reached their highest level in 12 years. Northern Ireland’s Residential Property Price Index increased by 1.1% q/q in Q1 2021 with prices 6.0% higher relative to the corresponding period a year ago. That marks the largest year-on-year increase since Q3 2016 and is more than double the rise in private sector rents (+2.6% y/y). Northern Ireland’s residential property inflation is running at twice that of the Republic of Ireland (+3.0% y/y) but is below that of the UK (+9.1% y/y). The latter represents the fastest rate of residential property price inflation in the UK in 13.5 years. Local residential property prices have now increased by 53% relative to their trough eight years ago. But despite this growth, the standardised residential property price (£149,178) is still one-third below Q3 2007’s freak of £224,670. The latter doesn’t take account of inflation. Adjusting for inflation, Q3 2007’s peak was £301,000 in today’s money – double the price of houses some 13.5 years later.Continue reading