OPINION: Latest housing market analysis
WALK into any estate agent who deals with upmarket properties in Northern Ireland, and look towards the shelves that show the very best houses.
You will see a dream that refuses to die.
Vast prices, often well in excess of 1m, are still being sought for the top properties.
A generation of homeowners saw their neighbours win the property lottery, and hoped that they could cash in too. Many now hope that if they hold on long enough, premium prices will return.
You can hardly blame someone who thought their house was worth 750,000 struggling to come to terms with the fact that it may now be worth 450,000 – or less.
That 300,000 difference might have been the capital that would have funded a retirement to Spain.
Even the tens of thousands of homeowners who thought their home was worth, say, 300,000 might have started to draw up plans for the future that are just not feasible if the house is now worth 180,000.
Yet numerous surveys suggest that this is indeed what it is worth.
The easiest way to value a house today is to establish its peak value, and deduct a minimum of 40 per cent.
It has often been said that wealthy areas will suffer less from the downturn, but it is just as possible that they will in fact suffer more.
Some of the most dramatic percentage price rises were at the top of the market, and so the falls may also be greater.
Luxury apartments in top notch developments are still being marketed for well over 500,000, sometimes over a million.
But it Kate Bittles cannot sell a large detached house in one of Belfast's finest streets for 650,000, what possible chance is there that a penthouse will fetch more?
In the 1990s, I visited Bermuda where one of the finest houses on the wealthy island finally sold for $7m, years after it had first been offered for sale for $25m.
That is a fall of more than 70 per cent, equivalent to a house in Malone that was worth 2.5m at the peak now being worth only 700,000.
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Tuesday 14 February 2012
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