The housing market in Northern Ireland is continuing to push higher despite growing concern around the cost-of-living crisis.
That is the message from two housing market surveys released this week which both said the tight supply picture, with only a limited number of houses on the market, combined with thirsty buyers has driven average house prices higher.
The trend is showing no sign of cooling, according to the RICS and Ulster Bank Residential Market Survey, which revealed the property agents it talked to expect prices to continue rising over the next three months.
It reported a rally in April despite ongoing inflationary pressures from an increase in the price of energy, food and other goods.
“Despite growing macro headwinds in the form of cost-of-living pressures and higher interest rates, the residential market continues to see modestly positive trends in new buyer enquiries,” RICS Economist, Tarrant Parsons, said. “For the time being at least, even though there is a lot of caution about the future economic landscape, it seems that limited supply available on the market, coupled with steady demand growth, are still the overriding drivers of house prices.
“As such, there is little evidence at this stage of house price inflation losing much momentum, while expectations for the coming 12 months have only moderated slightly from recent highs.”
It was a similar picture in the Ulster University House Price Index which showed the average price of a house in the province stood at £202,325, up 9.7% on the year.
Terraces and townhouses saw the biggest jump, up some 13.2% on the year, while semi-detached houses climbed 7.1% and detached by 4.2%. The report said there is a particular shortage in detached family houses in the £200,000 to £300,000 range.
Dr Michael McCord, Reader in real estate valuation at Ulster University, said an increase in the cost of building materials is exacerbating the tightening supply picture.
“The housing market has continued to see price growth entering the first quarter of 2022,” he said. “This has not only been driven by continued demand and sales completions, but as a consequence of the ever-increasing supply crunch which has emerged over the past four quarters, which is distorting normal market operations and imbalance.
“The heightened costs of materials are beginning to have an impact on development phases being released which is further squeezing the supply side of the market. Equally, the current inflationary pressures and emergent cost of living crisis also evident in the market. While these are not curtailing current market sentiment or indeed appetite, they may start to have an impact upon future demand over the next few quarters and translate into house prices tapering off.”
