Last week’s limelight was on Chancellor Hunt who delivered a much-awaited path for fiscal consolidation. While this should assuage financial market concerns and pressure on the BoE to tighten rates, households will be hit hard. Sure, the OBR seems optimistic about the pace of recovery but that won’t materialise anytime soon. Plus, energy bills will rise again in April. More tough times ahead.
Continue readingHouse prices
Residential property prices hit a 12.5-year high
The latest NI housing statistics, transactions, starts and completions for Q2 2021 were released this morning by NISRA Property prices, transactions, starts and completions all rose year-on-year in Q2 2021. Estate agents and house builders have experienced a ‘V-shaped’ recovery but how long will the good times last?
Continue readingNI house prices rising but supply softening
This time is different. Northern Ireland’s housing market was front and centre during the last recession during the late noughties. But this time is different. While output has posted its steepest fall in a century, the housing market has been one aspect of the economy that has fared better than most. Residential property prices have defied gravity and have just completed their seventh consecutive year of annual price growth. Meanwhile housebuilders and estate agents have witnessed a ‘V-shaped’ recovery from the record rates of decline in house completions and transactions.
Continue readingHousing market slowdown underway?
One direction. Northern Ireland’s house price recovery is six-years old. For twenty-three of the last twenty-five quarters residential property prices have gone one way – up! Despite this significant run of steady price rises, less than one-third of the 57% drop in prices that occurred between Q3 2007 and Q1 2013 has been recouped so far. As of Q2 2019, local house prices were still 39% below Q3 2007’s ‘freak peak’.
Weekly Brief – Unparalleled times
Prime Minister Theresa May is due to unveil Brexit plan B to Parliament today but it is unlikely to differ much from her first version. Following a crushing defeat on the Withdrawal Agreement and having narrowly survived a no-confidence vote, Mrs May offered an olive branch of cross party talks but was rebuffed by Labour leader Jeremy Corbyn. Talk of an extension of Article 50 is on the rise but an exit from EU without a deal is still possible.
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Chief Economist’s Weekly Brief – Stuck in orbit
The labour market continues to strengthen but wage growth refuses to escape its sluggish trajectory
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Two-speed NI housing market
The latest Northern Ireland Residential Property Price Index shows that overall average house prices increased 3.1% quarter-on-quarter and 4.4% year-on-year. Continue reading
Chart of the Month – 10 years since the property price peak
As we approach the 10th anniversary of Northern Ireland’s house price peak (and subsequent correction), we’ve been seeing some encouraging signs in the mortgage market.
2016 saw Northern Ireland notch up its fifth consecutive year of mortgage growth. According to the Council of Mortgage Lenders (CML) there were 13,800 loans advanced for house purchase. This represented a rise of over 5% year-on-year, with last year’s total representing the most mortgages advanced since 2007.
Despite a rise of 80 percent since 2008 though, mortgage volumes in Northern Ireland are still only half of what they were a decade ago.
The number of first-time buyers in Northern Ireland hit a 10-year high last year (8,000). However, this is still over 10,000 fewer than 2001’s peak.
The recovery in the mortgage market has been more marked within the First-Time Buyer (FTB) segment than the Home Mover market. The latter’s recovery has been somewhat disappointing.
In 2016, there were only 5,800 mortgages advanced in the Home Mover market; this was just 1/3rd of the volume of activity in 2006 and on a par with 1980/81. Lack of supply of certain property types and the legacy of negative equity are hampering this market.
House building is on the rise and people are gradually paying off their debt. But the legacy of what happened 10 years ago will continue to be felt for some time to come.
Chief Economist’s Weekly Brief – The solitary shoe
Those waiting for the post-vote shoe to drop will be disappointed. On most measures either the initial ‘Brexit’ shock has been reversed or it never happened. So much depends on jobs – their availability and pay. It’s early days still.
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Chief Economist’s Weekly Brief – Never a dull moment
A former Bank of England Governor once said of central banking that “boring is best”. Last week though, central bankers were once again hogging the limelight. First off, the US Federal Reserve, which having raised rates must now work out whether the economy can support them. Second the Bank of Japan, which joined the negative rate club. And with all eyes on the Bank of England this week, “boring” seems a distant memory.