First House Price Rise Recorded In Northern Ireland Since 2007

First House Price Rise Since 2007

House prices in Northern Ireland have increased for the first time since 2007.

Between the start of this year and June, residential property prices rose by two per cent, official statistics showed.

All property types, including detached, semi-detached, terrace and apartments, increased in value.

Stormont Finance Minister Simon Hamilton said: "It is promising to note that this is the first quarter since 2007 that an increase has occurred and confirms the views of local commentators that the property market here is beginning to stabilise.

"Over the long term, the index shows that the local market has rebalanced with prices at pre-2005 levels."

According to data from the Northern Ireland Statistics and Research Agency (NISRA), the standardised residential property price for all types of home was £96,327 during the three months ending in June. Detached houses were worth £153,063 and terraced £62,690. Semi-detached properties sold at £95,903 and apartments were £76,884.

In areas like North Down, Carrickfergus and Lisburn, the price across all properties was £107,535 compared with £91,165 in the west and south, which took in Armagh, Fermanagh and Newry.

The west and south was the only area to show a quarterly decrease of 1%. However, prices there increased by 4% between the final quarter of last year and the start of this year.

Overall prices were highest in Castlereagh on the outskirts of Belfast and lowest in Craigavon in Mid Ulster.

The agency said it was still too early to say if the property market had bottomed out.

Alan Bronte, commissioner of valuation for Northern Ireland, said the cost of houses in relation to incomes had reached a more normal level, from nine times gross salary at the peak down to four times now.

"Most people are buying a house for a home that they will pay back from their normal income," he said.

"Houses are much more affordable now than they have been in many recent years and we want to see that maintained because people need a home."

Key results from the NISRA survey of all house prices based on stamp duty and land tax showed:

:: Between quarter one (January to March) this year and quarter two (April to June) residential property prices increased by 2%.

:: Prices increased over the quarter across all property types, the first quarter since April to June 2007 that this has happened.

:: Because of falls between July last year and March this year prices fell over the year by 3%.

:: The residential property price index for Northern Ireland peaked from July to September 2007.

:: Prices today are under half their peak value - a 53% fall.

Mr Bronte said in 2006/07 people were buying property as an investment.

A lot of people who bought near the peak are trapped in their homes by negative equity, where the house is worth less than they bought it for, meaning any sale will not pay off their mortgage.

He added: "There remains a problem for a sizeable group of people, a concern for the economy and a concern for the market that there is negative equity, but we don't wish to see that (price) graph go straight back up again to bring people out of negative equity, we don't want it to rise at the level that it was rising at in 2006/07."

The cost of detached properties has increased by 2% over two consecutive quarters. Prices today are typically 5% lower than the first quarter of 2005.

The quarterly increase of 1% in prices of semi-detached properties is the first increase since the second quarter of 2010 and prices are almost a tenth lower than 2005 levels.

Terraced prices are 7% lower than the same period last year and 22% below 2005 levels.

Apartments increased by 2% between the first and second quarters of this year but are a fifth lower than at the beginning of 2005.

There were 3,460 residential property sales recorded from April to June this year, a 10% increase over the second quarter of last year.

The local economic recovery is expected to gather pace next year, according to Danske Bank's latest forecast.

The best performers will be those operating in international markets and, while relatively weak growth will prevail in the second half of this year, the local recovery will gather pace in 2014, the financial institution said. Overall growth is forecast to be 0.5% this year and 1.7% next year.

Bank chief economist Angela McGowan said: "Whilst there are some encouraging signs in the economy - particularly at a global and UK level - Northern Ireland's economy still appears to be recuperating at a slower speed.

"This is due to the fact that Northern Ireland is predominantly a small firm economy with lower productivity compared to many other regions and has relatively low levels of international trade."

The report showed corporate and consumer confidence improving; however, it will take time for higher confidence levels to translate into increased consumer spending and business investment.

Most private sectors in Northern Ireland will experience relatively weak growth levels between 0.8% and 1.8% this year.

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