Supply Squeeze Pushes Up Prices in Northern Ireland
Despite growing transaction activity, house prices in Northern Ireland are rising and set to continue on the back of a shortage of new supply.
According to the latest RICS/Ulster Bank residential market survey, housing supply remains a problem, forcing property prices higher despite increased sales. The survey reports new buyer enquiries are rising at a faster rate than new vendor instructions, putting additional upward pressure on Northern Ireland's property prices.
Samuel Dickey, RICS' Northern Ireland residential property spokesman said: "Supply remains quite tight with not a lot of properties coming on to the market and this lack of supply combined with rising numbers of people looking to buy is leading to rising prices and the expectation of further rises in the months ahead".
According to government figures, 10,066 social and affordable homes have been delivered to Northern Ireland in the last four years, much more than the 8,000 target set by the Department for Social Development (DSD). Out of this allocation 6,101 were social homes and 3,965 affordable and around £900m was invested over the four years.
DSD Minister Mervyn Storey said: "Not only has this investment delivered 10,066 homes but it has helped support the construction industry and provided employment for many people through a difficult economic climate".
Northern Ireland's property market started 2015 as it had finished 2014 with prices house prices rising rapidly. Industry experts predicted that house prices would outpace those in the rest of the UK this year and it looks likely predictions are accurate.
Samuel Dickey of RICS Northern Ireland said: "The local housing market is expected to benefit from the reform of stamp duty with the large majority of homebuyers here paying less of the tax. This will help encourage activity".
"In terms of prices, the gap between demand and supply is creating upward pressure. However the slowing economic recovery and public spending environment will present challenges for the market. Overall, RICS expects prices to rise on average 4% this year, a moderation in growth relative to 2014," he added.