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jwrag

NI House Prices up 6% why?

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According to Nationwide Survey NI house prices are up 6%. How could this be, with all indications that the financial future of this region is looking shaky.

 

https://www.belfasttelegraph.co.uk/business/northern-ireland/northern-ireland-house-price-growth-highest-in-the-uk-37681828.html

 

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I hope you're correct, I went to look at a house before Christmas which I liked but thought was over priced. I predicted it wouldn't sell and would languish on the market forever, but it was shocked to see that it had gone sale agreed. Crumbs!

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Nationwide holds such a small part of the NI Housing Market than no one takes their report serious anymore. At one time they were one of the larger players and their report carried a lot of weight. The best report is the NIRPPI Report that is issued every quarter. Although looking at the houses that completed in the previous quarter, therefore reflecting the sales activity in the quarter before that it covers all sales and is therefore the most accurate.

It has showed no such increase..

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The local market where I am in Whiteabbey seems to ticking up nicely. We are taking about sub-£100K houses although only just now. NI wages are not that low compared to other similar UK regions. The market in the South East (of England) has definately softened.

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21 minutes ago, The_Equalizer said:

The local market where I am in Whiteabbey seems to ticking up nicely. We are taking about sub-£100K houses although only just now. NI wages are not that low compared to other similar UK regions. The market in the South East (of England) has definately softened.

NI wages are lower than every region apart from the north east. It's also 20% lower than the UK average. They certainly are lower than uk regions. 10% lower than Scotland and the north west. 

Also worth noting the DUP only yesterday were arguing that NI needs access to cheap migrant labour. Our elected representatives are actively working to keep NI wages down. 

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Without getting into this too much according to the Northern Ireland Statistics and Research Agency:

Annual Survey Hours and Earnings - NISRA

For Northern Ireland:

"Median gross weekly earnings for full-time employees (“weekly earnings”) in April 2018 were £521, an increase of 4.2% from £500 in 2017. This is the largest increase recorded since 2015 (5.4%). "

Compared to the UK as a whole:

" In the UK, weekly earnings were £569, an increase of 3.5% from 2017 (£550). This is the largest increase in 10 years. When adjusted for inflation, UK weekly earnings increased by 1.2%, which, similar to NI, followed a decrease in real earnings last year. "

I assume that the 'problem' with NI is there is a disproportionate number of people who aren't working which skew things like household income.

We have the lowest house prices by UK region - see fig. 4 of this ONS report:

Jan 20045 - June 2018 House Prices - ONS

I did laugh at the graph for the infamous 2007 period where we were top.

Basically, if you have a full time job in NI you have access to relatively cheaper houses than a lot of the UK.

 

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1 hour ago, The_Equalizer said:

Without getting into this too much according to the Northern Ireland Statistics and Research Agency:

Annual Survey Hours and Earnings - NISRA

For Northern Ireland:

"Median gross weekly earnings for full-time employees (“weekly earnings”) in April 2018 were £521, an increase of 4.2% from £500 in 2017. This is the largest increase recorded since 2015 (5.4%). "

Compared to the UK as a whole:

" In the UK, weekly earnings were £569, an increase of 3.5% from 2017 (£550). This is the largest increase in 10 years. When adjusted for inflation, UK weekly earnings increased by 1.2%, which, similar to NI, followed a decrease in real earnings last year. "

I assume that the 'problem' with NI is there is a disproportionate number of people who aren't working which skew things like household income.

We have the lowest house prices by UK region - see fig. 4 of this ONS report:

Jan 20045 - June 2018 House Prices - ONS

I did laugh at the graph for the infamous 2007 period where we were top.

Basically, if you have a full time job in NI you have access to relatively cheaper houses than a lot of the UK.

 

NI had a large number of economically inactive but a lower unemployment rate than the UK as a whole BUT that doesn't effect average earnings. Average earnings are exactly that, the average wage of those in work. 

 

Most people in other regions get paid more for work than someone in NI. Of course the public sector is the exception, which is a disproportionate part of our workforce. 

Weekly earnings and household income aren't the same thing. 

Edited by 2buyornot2buy

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3 hours ago, 2buyornot2buy said:

NI had a large number of economically inactive but a lower unemployment rate than the UK as a whole BUT that doesn't effect average earnings. Average earnings are exactly that, the average wage of those in work. 

 

Most people in other regions get paid more for work than someone in NI. Of course the public sector is the exception, which is a disproportionate part of our workforce. 

Weekly earnings and household income aren't the same thing. 

I think this is pretty much what I said. Average weekly earnings are about 8% off the UK average based on the figures I produced. NI's house prices are the lowest in the UK (although from memory the North East of  England might be lower if looked at by region). Overall houses are less expensive here in NI than most of the UK and possibly the reason why we have stronger house price growth. When I say to folks back in the South East of England that you can buy a house for less than £100K they are amazed.

My reference to household income was the fact it is relatively low to the rest of the UK. This might be explained by the large number of people who are 'economically inactive' thereby bring the average down.

 

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24 minutes ago, The_Equalizer said:

When I say to folks back in the South East of England that you can buy a house for less than £100K they are amazed.

This is whats known as a fallacy of relative privation.  

When I say to people a 1 bed flat can be bought for 600k in London they are amazed. 

 

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17 hours ago, 2buyornot2buy said:

This is whats known as a fallacy of relative privation.  

When I say to people a 1 bed flat can be bought for 600k in London they are amazed. 

 

It wasn't a justification of prices at either level, just an observation - we were taking about the UK market after all. The original question was about why houses in NI have risen 6% in the last year. I say it is no surprise.

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1 hour ago, The_Equalizer said:

It wasn't a justification of prices at either level, just an observation - we were taking about the UK market after all. The original question was about why houses in NI have risen 6% in the last year. I say it is no surprise.

Why no surprise? Wages are only up 2%. 

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23 minutes ago, 2buyornot2buy said:

Why no surprise? Wages are only up 2%. 

Wages were up 4.2% - see NIRSA link in previous post. Average full time wage is approximately £27K. Average house price about £133K (from memory). The demand appears to be there as is the availability of finance. There was cetainly demand in the summer when I was buying and the local market to me - we still have our original house to sell - is certainly on the up. NI is relatively cheap to the rest of the UK and RoI too. Whether they are good value or not is a separate question.

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1 hour ago, The_Equalizer said:

Wages were up 4.2% - see NIRSA link in previous post. Average full time wage is approximately £27K. Average house price about £133K (from memory). The demand appears to be there as is the availability of finance. There was cetainly demand in the summer when I was buying and the local market to me - we still have our original house to sell - is certainly on the up. NI is relatively cheap to the rest of the UK and RoI too. Whether they are good value or not is a separate question.

2% when you adjust for inflation. 

But you're right. The easy credit is there so the demand seems to be there. We'll not get into price vs value arguments however it's fair to say houses are cheaper here and wages are lower. 

Prices are still 4.8 times average full time earnings. 

Edited by 2buyornot2buy

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9 minutes ago, 2buyornot2buy said:

2% when you adjust for inflation. 

But you're right. The easy credit is there so the demand seems to be there. We'll not get into price vs value arguments however it's fair to say houses are cheaper here and wages are lower. 

Prices are still 4.8 times average full time earnings. 

Fair enough and, when put at 4.8 times full time earnings, it is all a bit scary.

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On 05/01/2019 at 17:37, jwrag said:

According to Nationwide Survey NI house prices are up 6%. How could this be, with all indications that the financial future of this region is looking shaky.

https://www.belfasttelegraph.co.uk/business/northern-ireland/northern-ireland-house-price-growth-highest-in-the-uk-37681828.html

It's all very odd.

There was a report on another forum I post on of someone looking at houses just outside of Belfast, in the 250K range, and apparently nothing was selling. His opinion was that there was a stalemate of sorts happening, people unwilling to drop prices and lots of chains unable to complete because of it.

But then again, most of what comes up in Belfast sells quickly, especially if it isn't a complete dump (as many places are).

A country heavily dependent on public money, with no functional government, with the source of that public money going through turmoil with Brexit...I'm not ruling out buying a house myself, but anyone I know that was thinking of moving 'up the ladder' has cancelled plans to do so because they didn't think it was worth the amount that was being asked for a slightly bigger house.

A mate of mine went to see a mortgage advisor recently who told him many people walk in with 5 figure credit card debt, and some people can't even tell him what exactly their wage is.

At the end of the day it all hinges on easy access to credit, doesn't it. If credit dries up, or becomes significantly more expensive, the whole house of cards collapses. I know that the UK will do everything in it's power to stop that happening; so it's a case of whether or not an external event will force it.

To those who say 'it's cheaper than the rest of the UK', that's only because the rest of the UK is ridiculously overpriced.

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Depends on how far out of Belfast. A good number of sale agreed and sold in BT37 over £250K if it is nicely done. I seem to remember that many people are opting for five year fixed which gives you a good degree of certainty.

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35 minutes ago, The_Equalizer said:

Depends on how far out of Belfast. A good number of sale agreed and sold in BT37 over £250K if it is nicely done. I seem to remember that many people are opting for five year fixed which gives you a good degree of certainty.

Yeah if I buy I'll be fixing for a long time, at least 5 but possibly 10 years if I can get it.

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On 10/01/2019 at 11:14, JoeDavola said:

It's all very odd.

There was a report on another forum I post on of someone looking at houses just outside of Belfast, in the 250K range, and apparently nothing was selling. His opinion was that there was a stalemate of sorts happening, people unwilling to drop prices and lots of chains unable to complete because of it.

But then again, most of what comes up in Belfast sells quickly, especially if it isn't a complete dump (as many places are).

A country heavily dependent on public money, with no functional government, with the source of that public money going through turmoil with Brexit...I'm not ruling out buying a house myself, but anyone I know that was thinking of moving 'up the ladder' has cancelled plans to do so because they didn't think it was worth the amount that was being asked for a slightly bigger house.

A mate of mine went to see a mortgage advisor recently who told him many people walk in with 5 figure credit card debt, and some people can't even tell him what exactly their wage is.

At the end of the day it all hinges on easy access to credit, doesn't it. If credit dries up, or becomes significantly more expensive, the whole house of cards collapses. I know that the UK will do everything in it's power to stop that happening; so it's a case of whether or not an external event will force it.

To those who say 'it's cheaper than the rest of the UK', that's only because the rest of the UK is ridiculously overpriced.

I posted something similar to this a while back:   There's near full employment in NI (using standard definitions, not actually total employment) at the moment.  Plus there seem to be lots of new jobs in the tech sector around Belfast with decent wages.  Interest rates are near zero and have been for a decade and the banks are keen to lend.  The public sector is a big, stable employer and the government has not been keen to make job cuts so far.   There have also been a lot of immigration over the last decade.   And of course NI took about a 50% haircut on average prices from peak after the bubble burst, around a decade ago so they are starting from a reasonable level.

No surprises that house prices are going up under that set of conditions.  The biggest thing that is likely to put downward pressure on price is cost and availability of bank credit for house purchases.  That will likely go hand in hand with a poorer economic outlook adding further downward pressure.  But as long as the current print-fest continues to keep the zombies alive, there's scope for prices to keep rising.

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36 minutes ago, Sour Mash said:

 But as long as the current print-fest continues to keep the zombies alive, there's scope for prices to keep rising.

Yeah I think ultimately you're right. Good analysis.

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Basically this

https://www.theguardian.com/money/2019/jan/10/four-in-10-uk-first-time-buyers-will-retire-with-mortgages-fca-warns

I've been saying it for years, extended mortgage terms, zero pension savings and kids in your mid/late 30's is what the younger generation can expect. All they while servicing the debts and pensions of you parents to pay for levels public service and quality of retirement you can only dream of. 

 

The Financial Conduct Authority (FCA) found that 40% of borrowers who took out a mortgage in 2017 will be aged over 65 when their mortgage matures – leaving them unable to save for a pension, and vulnerable to any financial shocks.

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On 10/01/2019 at 11:14, JoeDavola said:

 some people can't even tell him what exactly their wage is.

 

Is this not fairly common? I’m self employed and I only have a rough idea of my income. Some people pay me up front, others take a few days. A very few (luckily) don’t believe in paying their bills at all.

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On 08/01/2019 at 09:31, 2buyornot2buy said:

NI wages are lower than every region apart from the north east. It's also 20% lower than the UK average. They certainly are lower than uk regions. 10% lower than Scotland and the north west. 

Also worth noting the DUP only yesterday were arguing that NI needs access to cheap migrant labour. Our elected representatives are actively working to keep NI wages down. 

There seems to be many more jobs in the NE of England, in my sector anyway yet lower house prices than NI

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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