Editorial: ​NI house prices are not too high, nor too low

​House prices in Northern Ireland are now at almost the level they were at in 2007, at the peak of the then boom.

​According to the most definitive measure of prices, the Land Registry, prices are at almost 90% of the level that they were at 18 years ago.

Does that mean we are the midst of another boom? Not at all. House prices are in fact much cheaper in real terms than they were back in 2007, almost two decades ago. Overall prices (ie the cost of living) in the UK have risen 70% since then. Home prices would need to rise another 70% to be back to 2007 levels.

But we should not want that or anything even approaching it, because it would not only make housing unaffordable to young people, who would be unable to join the housing ladder, it would worsen asset inequality between those who own homes and those who do not. In any event, it would merely lead to another house price crash, which is the last thing we need. NI property prices fell by more than half in the last crash.

We reported yesterday that house prices in the province, while not booming, are buoyant. The number of house sales in NI grew by 12% in the second quarter of the year.

Residential properties also reached sale agreed four days faster than in the April to June period last year, according to PropertyPal’s latest quarterly report on the Northern Ireland market. Price growth also strengthened, with the average house price in Northern Ireland increasing by 8.9% on an annual basis to just over £230,000.

While Land Registry gives the most authoritative understanding of what has happened in prices, other property data such as this can give a better idea of what is currently happening. The market is strong, and people in negative equity are – thank goodness – mostly out of it.

But it would be a good balance between buyer and seller if prices went no higher.