In the third quarter of 2022, there was a significant drop of about 18% in house sales in Northern Ireland compared to the previous three months. This slowdown was revealed by the latest research from Ulster University. On the other hand, house prices went up by 1.3%, making the average home cost around £206,952.
The Northern Ireland Quarterly House Price Index highlighted that efforts by the Bank of England to control inflation, along with ongoing political instability, have severely impacted the housing market, causing a considerable drop in consumer confidence. Affordability has been affected due to fixed rate mortgage deals increasing to over 6% in response to the rapidly rising borrowing costs.
Dr. Michael McCord, a real estate valuation expert at Ulster University, pointed out that the recent spike in mortgage interest rates is the largest shock to interest rates since the 1980s. This has slowed down buyer inquiries, affordability, and price growth in the housing market. It's expected that this price correction trend will continue into 2023.
In terms of housing types, terrace and townhouse prices saw the highest annual price change, increasing by 7.4% compared to the same quarter last year, with an average price of £140,231. Apartment prices also rose significantly by 7.1%, with an average cost of £149,977. Semi-detached house prices increased by 3.9% over the year, though they were slightly down compared to the previous quarter, with an average price of £187,613. Detached homes saw a slight increase in annual price growth of 2.6%.
Michael Boyd, from Progressive, noted that the slowdown in the housing market was expected due to political instability and economic volatility, leading to a decrease in prices in most local government districts from Q2 to Q3 2022. He anticipated a further slowdown in the market in the last quarter of the year and a challenging economic year ahead. Boyd emphasized that political stability is crucial for the housing sector and the broader economy.
Ursula McAnulty, Head of Research at NI Housing Executive, highlighted that the housing market in Q3 2022 was subdued, marked by a reduction in transactions and a slowing annual price growth trend. Economic challenges are expected to persist, leading to more cautious consumers. However, the demand and supply imbalance will somewhat mitigate the impact of this caution on the housing market. Despite this, challenging times are anticipated for the housing market in Northern Ireland.
