Q4 2007 report now available to download here:

http://www.bankofireland.co.uk/pdf/BoI_Hou...dex_Q4_2007.pdf

Also ...

Q3 2007: http://www.nihe.gov.uk/completed/priceindexq3.pdf

Q2 2007: http://www.nihe.gov.uk/completed/priceindexq2.pdf

Q1 2007: http://www.nihe.gov.uk/completed/housepriceindex.pdf

Also note the interesting final 4 paragraphs from Alan Bridle at BOI. I think a lot of us here at the HPC NI forum have been reading the market exactly as the "experts" see it too.

It's interesting, reading these reports that they did not spot these trends last year - and appear almost suprised with what many people here had been expecting.

3 months time will be interesting reading.

Hi Paul,

loving the graph of NI hpi especially the 'spike':

Click to view attachment

Compares favourably with one of my earlier sketches, illustrating my theories on crash symmetry:

Click to view attachment

The rollercoasters just gathering pace

"In the surreal world of house price forecasts, there is some consensus
that average prices could fall by 5 to 10% for the full year 2008. An
interesting benchmark in a market, similar but not identical and a bit
further advanced in the property cycle, might be the Irish Republic.
In 2007 the average price drop was recorded at c 7%. While opinions
vary, there will be common agreement that in a post-boom scenario,
it will be preferable if the adjustment process in Northern Ireland
continues to take an orderly path. While an obvious negative for the
construction sector in the short term, a slowdown in the rate of new
builds in 2008 may ultimately be price supportive for the market.
A steeper dive in prices would have unwelcome consequences for
household confidence and the wider regional economy."


I have a lot of respect for Alan Bridle, he has an honest and open style and this has been reflected in many of his reports.

However, I don't know whether a 'perfect world' orderly correction scenario is possible based on the incline that got us here. Similarly, a lot of priced out FTBs may take a different view.

Basically, the question is, can 40-50% rises in a year (or approx. 80-90% since early 2005) become semi-sustainable i.e. lead to a slower correction where the economy suffers less than a 'steeper dive' scenario?

We shall all see in the coming months.

There is of course arguments to be made for taking the 'medicine' sooner and moving towards a more sustainable housing market sooner.

If there is a 'perfect-world' solution that can restore sustainability to house prices and that is the least damaging to the wider economy bring it on; however, market forces tend to have their own agenda.

edit - typo

Hang on a second... is this report saying that Northern Ireland house prices have just fallen by £20,000 in just 3 months?

wow!!

It is not clear to me if this is a drop of 20k in the past quarter or since the top of the "spike" in Spring/Summer '07.

I do actually feel however that the report is painting the best picture that it possibly can in fairly dire market conditions.

The devil is always in the detail with these things and often with what is not said too.

Lead report contributor Alan Bridle from the Bank of Ireland states in the report introduction and assessment that

"Given the poor sentiment and moribund state of the market in recent months, some may be surprised that the correction in prices was not of a larger magnitude but with the apartment sector carrying a much greater weight in this survey (44% of transactions), the influence on overall price trends is particularly significant."

So what that says to me is that if you strip out the 2 in 5 NI property sales during this past quarter that were inflated priced apartments - city centre presumably and most likely purchased by buy to let investors and not first time buyers, that the market figures generally are actually much worse across the whole of NI than first imagined. Would I be right therefore in concluding that consequently the drop in property prices is accelerating at a pace that none of us could have predicted? A pace akin to the "take off" in prices over the last 2 years? ie. leading to a short sharp correction that others have alluded to on this forum?

In my mind the 44% of apartment property sales in this report skew the data disproportionately and artificially prop up and soften the blow of this report making reading easier to stomach ? Next Quarters report will definitely be interesting reading as I have a feeling that apartment sales will have fallen away by then.

I personally pity anyone who purchased a apartment (city centre or otherwise) in the last 2 quarters of 2007.

I would tend to agree - and there are also a number of apartments coming up for sale on estatemate where you can watch exactly what is added daily. I think people are taking fright and trying to exit this particular type of property with no hope of getting their premium costs back.

This article in the Times alludes to carnage for apartments
http://business.timesonline.co.uk/tol/busi...icle3406269.ece

Yes, I agree. Credit to him for acknowledging what's possible with a certain degree of openness given his position and authority.

As you say the devil is in the detail. When it comes to other commentators, especially in the NI Media, I always 'read between the lines' with regard to their reporting of the housing market.

Credit where credits due - I find little spin in the Irish News reporting of the above and that fellow (anyone?) who wrote in the Belfast Telegraph a while back seemed to do so with out the usual pasted quotes from nEAl tRAMPER.

paul65... from the Q3 2007 report that you linked to above:



From the Q42007 report:



So that is exactly a fall of £19,418 in 3 months

wow!

Wonder will it continue like that? That would be a fall of £77,672 by Christmas

Well spotted BB. So houses were losing £215 in value per day sitting on the market over the past quarter. Holy Moly! That is frightening. What was the calculation on the way up in the last 2 mad years? Anyone remember? Even though I don't own any properties I wouldn't like to be in the position where I'm forced into selling right right now with so much supply out there and the threat of repossession/bankruptcy and -ve equity looming ever closer Truly frightening - no wonder NI's auction rooms are full to bursting point with properties to shift.

Yep so according to those reports house prices are falling by £6,500 a month. And as we know; the crash has only started and it will last several years

Well, people have to live somewhere, you know... and there's suuuuch a shortage of land in NI!

That argument always cracks me up! I have a friend in England who bought about a year ago, despite me giving friendly advice to hold off (I think his fiance wears the trousers tbh!). He received a Maths degree from Cambridge and has always been a clever bloke. He then said there wouldn't be a crash as there is a shortage of housing in England. I lost the will to argue the toss!

I get the feeling there will be a glut of empty property on the market soon enough, when all those "investors" sitting on empty BTL properties get rid of them. Only then will people realise that the demand isn't what it was and there has been massive oversupply to this spurious demand. I really do fail to see how educated people cannot see that, unless A, houses are knocked down or B, there is a massive increase in population, that there will be enough houses to go around.

Off topic Traktion I see the cottage on the way to Downpatrick is still up for sale. Wonder what its on at now.

Interestingly compared to Bosco's graph of NI HPI that he posted above the graph from the same report on the propertynews.com website is slightly different. Now I don't know if it is a freudian slip, a genuine mistake or an attempt to mislead buyers/sellers but the graph on the recent Q4 House Price index has been altered on the PN.com website (as it cuts off all data points after 2005). See http://www.propertynews.com/boiSurvey/house_price_index.html and you'll immediately spot that the graph ends at 2005. Everything looks rosy in the garden if you are a potential seller looking at this information.

I have written an email to PN.com today to ask them to update this so we'll see how long it takes them to change the graph so that it falls in line with the graph from the published report which shows the full set of data to the end of Q4 2007 as per page 10 of the actual complete report http://www.propertynews.com/boiSurvey/bank...land_report.pdf</a>

Just goes to prove there are lies, damn lies and statistics!

haha, yeah I noticed it's been up and down a few more times since we discussed it a while back. I'm wondering if it keeps getting knocked off (lorries?) or blown off (freak wind vortexes?! ) as it's been up/down so many times! Either way, it doesn't look like it's selling!

Is it on property news? I just did a search under 300k and couldn't spot it from the picture. I tell you what though, Downpatrick has a *lot* of properties listed, with a lot of new sites too. You can almost smell the fear...

That's very sneaky of them! Let us know their reply!

Here it is on the EA website

http://www.peterfitzpatrick.co.uk/property/352

Did you see how many for sale in the Downpatrick area = about 600.

Ah, well found! £210k seems a bit much for something *right* on the edge of the road. I wonder whether the price has changed much? I may bookmark it and keep an eye on it our of morbid curiosity!

You have to love the mortgage calculated too... £1284.94 per month?! My rent is a 3rd of that, I have an extra bed room (albeit, a semi) and I don't step out of my door way onto a main road. Madness!

Re Downpatrick numbers, it is rather shocking. I'm sure when I last checked Downpatrick it wasn't half as high as that. My office is in Downpatrick (Down Business Park), but I'm not looking to buy here though, so I've not really been keeping track.

The proper graph has new been added to the PN.com website a full 2 days after the request: http://www.propertynews.com/boiSurvey/house_price_index.html

Their response was simply

I bet they typed that response through gritted teeth!

Nicely done!

I am sure you are right Traktion.

Isn't PropertyNews a pretty average website.
Not terrible - but certainly not first rate.

deleted

*** bump ***

This page needs moved up a bit.

The Nationwide reports are going to be useless as they have stopped lending mortgages.

I wonder will the figures in the next UU/BoI report be massaged/censored a bit?

Reports from the University of Ulster/Bank of Ireland - showing £6,500 a month drops are hard to argue with.

It's the sales volumes that will speak... er, volumes

http://www.nationwide.co.uk/hpi/historical/Q1_2008.pdf

in short...

Regional Headlines*

Region Average Price Quarterly % change / Annual % change

North £132,349 -0.7% 2.3%
Yorkshire & Humberside £151,764 -0.9% 0.2%
North West £154,124 -2.3% -0.2%
East Midlands £153,066 -0.8% 0.3%
West Midlands £160,715 -2.5% 0.2%
East Anglia £179,868 -1.4% 1.8%
Outer South East £211,119 -0.8% 3.3%
Outer Metropolitan £253,880 -1.4% 3.6%
London £296,772 -1.5% 5.6%
South West £196,711 -2.5% 0.3%
Wales £151,499 -1.8% 1.0%
Scotland £149,834 -0.1% 6.3%
Northern Ireland £196,892 -10.0% -3.4%
UK £179,363 -1.7% 2.2%

* Prices calculated on a mix-adjusted basis.

Edit - BTW, if I was a FTB, I would be celebrating tonight. Your time is coming, maybe a bit sooner than you think IMHO

10% in one quarter!!!!!

More importantly, -3.4% YEAR ON YEAR! (and its going to get worse before it gets better)

Now what I would like to know is will the papers have:

House prices down 10% in 3 months.

On the front pages? Or does it only make the front pages when house prices go up?

and that's the inflation adjusted data

As CBW pointed out we're now -ve yoy

Folks, it was a long time coming but the correction is here big time.

No more, ifs, buts and maybes. No more uncertainty over data sources (whether they are 'real' or 'indexed'). No more uncertainty over the initial rate of hp deflation.

edit - typo

aaah, it's but a temporary blip! I promise you, the prices will be up again by midsummer... of 2025

Did you not know the government was going to give everyone 40k towards to buying a house? Unfortunatly they remembered they didnt have any money left after expenses and their pay rise! so they could only afford to give MPs this allowance!

The 10% reduction is just a natural retreat at the minute, it will be interesting once the forecasted repos start and go on firesale, last few months auctions really just been assets recovery! So i doubt the full affect has yet to be felt!

Just for clarity, in the notes it says "All changes are nominal and do not allow for inflation"If you look at the chart on page 2 Northern Ireland looks like a mental case! Why did NI rise so rapidly in 2006? BTL from our friends south of the border?
It was the perception that did it! As Percy French would say "theres gangs of them digging for gold in the streets".

Thanks mmca22gr

I am so used to using the nominal data from the download section, that any discrepancy with this data I automatically assumed to be caused by inflation adjusting.

But I suspect that the Quarterly Release reported data is based on indexed* data or/and has some seasonal adjustment. (But I don't know this )

*re-edit: nationwide have their own index based on nominal data

Using the data download:

A.) Q4 2007 224816
B.) Q1 2008 196892


100 / A x B = 87.6

100 - 87.6 = 12.4% drop

Is that right or am I having a thick day

I think that it is significant no matter what way you look at it. A 50% crash? As you have said before in this forum, about as likely as a 50% increase. A willing and able buyer and a willing seller are required for a sale. I see over the last few days that the ability part is being tested, which should lead to falls and then a lack of willing on the part of the buyer. Personally I expected it to be alot stickier on the way down so and surprised by the figures for NI.
There are still a good few months to go before most of the ARM deals in the US have to be reset, so there could be tougher times ahead for the US - and us....

ditto

I reckoned upon around 6 to 7% falls for the quarter

I'm with BB never a truer word spoken, The Nationwide reports are going to be useless as they have stopped lending mortgages

Is that going to be the new bull defense

just kidding, I think we can say that the first quarter was pretty much not affected by Natwides decision in late March to pull a lot of their competitive deals. With regard to the future though all the banks etc. are now 'tightening up'.

Will this overall contraction in lending mean that the data (nationwide in particular) is just lower volume but still representative of the whole market?

Time will tell - If we get deflation after these years of Hpi + commodities inflation will cash finally be king?

edit - typo

more detail.........

http://www.thisismoney.co.uk/mortgages/art...mp;in_page_id=8

Nationwide hikes rates as mortgages fall
Simon Lambert, This is Money
27 March 2008

Nationwide announced it is actively seeking to turn away borrowers by hiking rates as new figures reveal mortgages for home buyers have plummeted by a third.

Britain's biggest building society has said that it is hiking two-year tracker rates by 0.57% for new borrowers, while its fixed rate mortgages will see an average of 0.2% added.

Nationwide said it was responding to market conditions and admitted it was turning away business by seeking to focus on quality rather than quantity.

Matthew Carter, Nationwide's director of mortgages, said: 'Nationwide sympathises with anyone who is concerned about the availability of affordable mortgages. We continue to offer our customers a wide range of fixed and variable rate mortgages up to 95% loan to value with, as always, a focus on prudent and responsible lending rather than volume.'

The decision came as the latest report from the British Bankers Association revealed 33% fewer loans were approved by its members for house purchases in February than in the same month a year earlier.

Just 43,870 mortgages worth £7bn for homebuyers were approved in February – down on the six-month average of 47,402 and £7.4bn.

Problems in securing funding for mortgages have hit banks as the global credit crunch grips the financial markets – with the lack of confidence in the banking sector filtering through to the property market.

The Council of Mortgage Lenders recently reported that members were struggling to find funds to meet demand, while the National Association of Estate Agents reported potential homebuyers at the lowest level for 20 years.

A number of lenders have announced cutbacks in mortgage lending, with financial information specialists Moneyfacts reporting that in one day it had been contacted by 19 lenders withdrawing products or restricting loans.

Industry sources say with products changing rapidly, lenders are being forced to pull deals as rates near the top of best-buy tables, because they cannot fund the high demand that ensues.

Chelsea Building Society made the unusual move yesterday of stopping all its products being sold through brokers until the end of the week while still selling the mortgages direct, as it was unable to meet demand.

The real deal will surely be the UU/BoI quarterly report due next month. Does it not feature all sales? Already 230k from 250k. Will it get to 200k this last quarter?

Hi Vespasian - AFAIK the UU/BoI quarterly House Price Index Reports are based on a sample of open market transactions so even that could be manipulated. However with so few sales over the past quarter they may well have to include every data point/transaction in order to actually produce the report. No more cherry picking now!

I knew that would get a response lol.

I wouldn't even try to discredit the report.

I don't disagree that house prices got out of control and need to correct but I don't think they'll drop to 100k for the average house.

IMO affordable housing won't be the problem, getting finance will. The banks are going to use the credit crunch to their advantage, to steal money from all who want to buy and those who have to remortgage, The "credit crunch" will be used as an excuse for years to come for higher lending rates.

The housing market is only the first to get hit, the next things are manufacturing, food and everyday commodities this is already happening, House prices will be the least of anybodies worries.

I'm going now to seal up the garage and start the car. just kidding.

Although on the bullish side, if house prices drop to an affordable level for first time buyes then it's at the level for investers too.

me neither

Ok then, where do we think they're going?

What's the average house. For me its a 3 bed semi 1000 sq ft, with a garden big enough for kids to play in a decent area.

Well what I'd like to know is what people here define as a first time buyer's house, and how much they think they will fall to.