House prices in the province fell by 6.5% over the first three months of 2016 the quarterly house price index compiled by the Ulster University suggests.
Publishing the latest data since the report for October to Decemeber last year the report identifies what it terms “a mini-correction” in the market and suggests the EU referendum may be a factor.
Produced in partnership with the Northern Ireland Housing Executive and Progressive Building Society, the UU research points to an easing back of the average house price compared to the strong market prevailing throughout the final quarter of 2015.
However, the survey also reveals a strong sales volume, consistent with previous quarters.
An overall average house price of £146,472 for the first quarter of 2016 is lower than might have been anticipated, the report says, based on strong growth during 2015, particularly in the third and forth quarters
It highlights a 1.4 per cent weighted increase in average house price over the year but a 6.5 per cent weighted decrease over the quarter.
Once again, the report highlights the cost of housinfg relative to other UK regions, with two-thirds of the houses sold at or below £150,000.
The research indicates that at a regional level, a broadly similar pattern of lower average prices is apparent for the first quarter of 2016.
“The research statistics are reflective of mixed feelings by the sector across Northern Ireland with some estate agents attributing the apparent slowing in first quarter simply to a seasonal fluctuation, others attribute it to house buyers’ concerns of economic uncertainty,” said lead researcher, UU professor Stanley McGreal.
“When it comes to overall performance by property type, the average price of terraced/townhouses, detached bungalows and apartments have increased over the year.
“In contrast, semi-detached and detached houses have experienced a slower rate of annual growth. Over the quarter, all property types, with the exception of semi-detached bungalows, have suffered reduced price levels.”
Joe Frey, head of research at the Housing Executive said: “A combination of a higher than expected increase in prices in the previous quarter and uncertainty surrounding the EU referendum probably explain the slight downturn in the market.
“However, given that transaction levels remain high and there is little sign of a significant affordability issue outside Belfast, the indications are that the market will continue its gradual recovery.”
Michael Boyd, deputy chief executive and finance director at the Progressive said the province had experienced consistent growth within the housing market over the last 18 months, with a strong performance in 2015.
“With projections for further growth within this sector, strong market transactions in Q1 have reflected that confidence,” he said.
“ However a number of factors including the prolonged Brexit debate, EU referendum, Assembly elections and stamp duty charges have contributed to the cooling of prices in the first three months of the year.
“While lack of supply is still an issue, houses in Northern Ireland remain very affordable, particularly when compared to the rest of the UK, which is good news for local house buyers. The mortgage market also remains buoyant with a significant increase in the first quarter of 2016 with strong market competition supporting low interest rates which also delivers great value for money within the Northern Ireland market.
“Mortgage activity across Progressive’s twelve branches have grown in Q1 2016 with a very positive 34% increase compared to the same period last year.”