Wednesday, February 20, 2008

The average price of a house in Northern Ireland has fallen by £20,000 in a QUARTER….but still no crash!!

House prices drop as boom slows

"The end of 2007 saw prices drop so that the average house was worth £230,000 compared with a peak last summer of £250,000." Prices in Belfast - currently less affordable than London or Sydney and in the list of 10 least unaffordable cities on the planet - have dropped by about 13% in a quarter, but apparently there's no crash. The reason? Well apparently (according to the author of this survey on the radio) a drop of a few more % - no doubt bringing Belfast on a par with London and Sydney - will make property 'affordable' again for buyers. Also, it's those 'strong fundamentals' again - the world economy has no effect on us - hadn't you heard that Belfast is the new Monaco?

Posted by shipbuilder @ 10:01 AM (1375 views)
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8 thoughts on “The average price of a house in Northern Ireland has fallen by £20,000 in a QUARTER….but still no crash!!

  • Crazy – there isn’t a single area of Northern Ireland that has house prices lower than 200k(!!). For an idea of how ridiculous a bubble that is, you’d only need to look east to Scotland where house prices in economically similar areas e.g. Ayrshire are at the 130/140k mark, and even that’s expensive given local salaries. Looks like NI house prices have a lot further to fall especially with the boom in ROI finished now too, there’ll be no more speculative demand from there either.

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  • Oooooh – so, those wanting to buy in Belfast can save nearly £7,000 a month, just by sitting on their backsides. Oh how the tide turns. I do wonder how much of the NI rise was down to money laundering activities – i.e mortgage fraud through dodgy surveyors/solicitors/developers.

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  • Location, location, location………NOT!

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  • Northern Ireland actually has fairly weak fundamentals. On the surface, things look good: employment is strong, there are shiny new cars in every driveway, and house prices are up – but dig a little deeper to see that it’s all built on debt.
    1) The increase in jobs in Northern Ireland is largely due to Westminster throwing money and public-sector jobs at them, in an effort to maintain the peace process. See chart below.
    2) The shiny new cars are of course bought on credit
    3) House prices in NI have risen particularly high because of the proximity of the Republic of Ireland. When the RoI joined the Euro in 1999, interest rates fell to the ECB’s new lower level. This ignited a property boom in Ireland (potentially worse than here in the UK). Irish investors, flush with cheap money, piled across the border to invest in Northern Ireland. Using their Euros at 4% they were able to inflate the market far more than Sterling at 6%.


    Public sector employment as a proportion of all in employment by region, four quarter average to June 2005.
    Source: National Statistics

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  • Mid Ulster. -25% in one quarter. Almost as unbelievable as the price increases on the way up.

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  • Delusions of Grandeur

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  • In an article in the Belfast News Letter, a local estate agent is telling sellers to drop their prices by 20% to get a sale. In a small, gossip-led place like NI, where 2 or 3 newspapers rule the roost, sentiment will turn very quickly with stories like these, so there’s more to come. The market is utterly dead in the water and the agents desperately need to get houses moving.

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  • ”Mid Ulster. -25% in one quarter. Almost as unbelievable as the price increases on the way up.”

    There now, but when the UK? Maybe already!

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