Northern Ireland house prices could take 10 years to stabilize from the housing crash.
While house price surveys suggest that NI housing market are beginning to stabilize, a Northern Ireland chief economist suggests otherwise. Dr Bernie argues that it will take a minimum of 10 years for prices to become level with 2007 house prices.
University of Ulster examined 1400 housing transactions and discovered that houses fell slightly in the second quarter of 2013.
The Office for National Statistics published figures stating that prices fell by 0.4% in the first 2 quarters of the year indicating an average price of £130,000.
University of Ulster discovered that 75% of the sample sold at £150,000 and below, and 41% sold at £100,000 and below. This is an important analysis giving potential first time buyers market an affordable housing price range.
The stabilisation shows an increase in the movement of housing transactions for that quarter catering towards first time buyers, even though the average housing price is practically unchanged.
Dr Bernie agreed that there has been a recovery in this price barrier for first time buyers. He states that there is still considerable time before the housing market as a whole will stabilise to 2007 levels because of the extreme decline of 50% in summer 2007 that the market suffered.
Northern Ireland real hourly earnings have fallen since 2009 by 9.75%, more so than the UK average hourly earnings by 8.5%.
Dr Bernie recognises Northern Ireland’s economic growth is recovering with a prediction of 0.5% in 2013 and possibly with an increase to 1.5% in 2014, presuming a good stable recovery in UK and Ireland. Manufacturing and construction are both reporting an increase in sales, exporting and services, while there has been a decline in unemployment this month.
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