Is a price crash/ major correction coming

[Lucando]

Any idea what the typical reduction in price is, if any, that agreed sales are going under offer for?

[2buyornot2buy]

41 minutes ago, BelfastVI said:

It is interesting times. Due to the higher interest rates (to what people have been used to for that last 10 years or so) many of the First Time Buyers who would have been looking 90%+ mortgages are not there. People either moving house or who have a larger deposit are still buying. But overall volumes are down 30% or more. Normally that would trigger a price fall. However, the cost to build has increased by over 30%. Anyone who has had any work done to their house in the last year or so will agree. Therefore new houses can't be delivered cheaper and there is a massive drop in housing starts. In the background rents are soaring.

We have well and truly entered a housing crisis.

Very interesting times. Who knows what way it's all going to play out. 

Speaking as someone who's had to carry out extensive building work recently, I can testify as to the massive material increases but still there's appears to be a massive difference in sq foot costs between regions (50%+). Obviously down to a number of factors, land conditions, spec etc. But also obviously land prices. There's going to be movement somewhere because there's only so much extending terms in a "high" rate environment can do and it isn't much. 

I also hate to be pedantic but rents are soaring BVI. They haven't even kept pace with inflation. 

[satsuma]

There are about 6900 houses on property pal now, so about 5% more than the start of the year.  Im seeing stuff get reduced but mostly its stuff that was on at silly money.  There has been a steady increase in the number of houses on property pal for the last two weeks.  Trade in the builders yards is way down.  Be interesting to see what happens next, I seem to remember Sep and Oct are busy for house purchase as people are back from holiday and itching to move.  

[BelfastVI]

On 11/08/2023 at 15:21, 2buyornot2buy said:

Very interesting times. Who knows what way it's all going to play out. 

Speaking as someone who's had to carry out extensive building work recently, I can testify as to the massive material increases but still there's appears to be a massive difference in sq foot costs between regions (50%+). Obviously down to a number of factors, land conditions, spec etc. But also obviously land prices. There's going to be movement somewhere because there's only so much extending terms in a "high" rate environment can do and it isn't much. 

I also hate to be pedantic but rents are soaring BVI. They haven't even kept pace with inflation. 

I don't know if 'soaring' was teh correct word as it is subjective. The alternative to buying has always been renting and I believe it is fair to say average rents have increased substantially.

I will leave this here.

 

Edited August 15, 2023 by BelfastVI
double post

[2buyornot2buy]

22 minutes ago, BelfastVI said:

I don't know if 'soaring' was teh correct word as it is subjective. The alternative to buying has always been renting and I believe it is fair to say average rents have increased substantially.

I will leave this here.

 

Housing benefit uprating at play here. It was uprated by 10.1% in April and feeds into the figure. Housing ass and HE set the floor on rents and rent increases.

Private rent increase will only ever meet wage inflation longterm. You can't borrow to pay the rent. 

[BelfastVI]

22 hours ago, 2buyornot2buy said:

Housing benefit uprating at play here. It was uprated by 10.1% in April and feeds into the figure. Housing ass and HE set the floor on rents and rent increases.

Private rent increase will only ever meet wage inflation longterm. You can't borrow to pay the rent. 

I believe NIHE benefit increase was a reaction to increasing rents rather than them getting out in front and driving the increase.

Demand and supply is the major factor. too many people chasing too few properties. I hear from agents that they are getting 100's of enquiries about rental listings. That's what drives rents.

[acidreign]

Rate of increase is slowing, determining factor:

Northern Ireland

Private rental prices in Northern Ireland increased by 9.2% in the 12 months to May 2023. The annual rate for Northern Ireland has slowed since the recent peak of 10.0% in the 12 months to March 2023, but remains higher than for other UK countries. Northern Ireland data lag behind the rest of the UK and will be updated in our next Index of Private Housing Rental Prices, UK bulletin, to be published on 20 September 2023.

Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

Let us see what 20th of this month brings, either inflated away beyond means still, or trend setting towards lower...

[satsuma]

Inventory in NI on PP is back over 7000

[headmelter]

Seems a lot of property returning to the market after going "sale agreed"... Mortgage lenders not agreeing with 'inflated' sale price I wonder ?

[Lucando]

Yes, this is what I am seeing too but it is completely at odds with the recent RICS report where sales are reported to the flying through and prices are expected to be increasing substantially.

I can't understand it. It seems, from the report, that Northern Ireland is immune from the basic principles of economics where price, particularly cost of mortgaes, dictates demand

[satsuma]

Houses are still selling, but I’m seeing stuff coming on at lower prices, couple of properties I was interested in are back on the market

[coypondboy]

16 hours ago, Lucando said:

Yes, this is what I am seeing too but it is completely at odds with the recent RICS report where sales are reported to the flying through and prices are expected to be increasing substantially.

I can't understand it. It seems, from the report, that Northern Ireland is immune from the basic principles of economics where price, particularly cost of mortgaes, dictates demand

its the booming trade between north and south and lack of property which is holding up prices.  My relatives in Newcastle County Down saying its boom time there at the moment with property prices still rising fast 

[2buyornot2buy]

On 13/10/2023 at 23:40, coypondboy said:

its the booming trade between north and south and lack of property which is holding up prices.  My relatives in Newcastle County Down saying its boom time there at the moment with property prices still rising fast 

It's a strange market. 

Newcastle transactions are down about 40% (overall market down around 20%). Q1 was the worst quarter since 2012. Price wise It probably hasn't moved in a year with inflation running at 10% during that period. 

[Pixie1]

Inventory has really been drying up recently. Only 6,400 properties are listed in NI and 937 in Belfast. Around 10% down from September/October.

[BelfastVI]

On 08/12/2023 at 11:55, Pixie1 said:

Inventory has really been drying up recently. Only 6,400 properties are listed in NI and 937 in Belfast. Around 10% down from September/October.

It's difficult to draw a conclusion. Generally low availability points to higher prices whilst a glut of properties for sale generally lowers prices.

My gut feeling - Prices have to increase.

Firstly: The cost to build has spiralled and new building control regulations will drive that further. Anyone who has carried out any work to their house over the last year or so will know.

Secondly: Rents (the alternative to buying) for decent houses have sky rocketed. 

Thirdly: Mortgage rates have been coming down.

And finally, don't underestimate the 'feel good' sentiment generated by our government getting back together 'again'. Not that they make much difference when in role but there is a lot of inward investment waiting on this settlement. 

[Uchimata]

I've noticed this one in East Belfast that has been on the market for the past few months, originally at 600k.

Noticed last week it had dropped 5% to 570k. Could this be the market starting to soften, or was it priced too expensive to begin with?
https://www.propertypal.com/17-ormiston-drive-belfast/933127

Maybe I'm too optimistic 🙂