The Ulster University research, which has been produced in partnership with the Northern Ireland Housing Executive and Progressive Building Society, analyses the performance of the Northern Ireland housing market during the fourth quarter of 2021 (October, November, December).
The report, premised upon 2,234 transactions, reveals an overall average house price of £198,890 which represents a weighted annual level of growth of 8.3% between Q4 2020 and Q4 2021. The Index displays a quarterly increase of 1.1% relative to Q3 2021. This growth is primarily driven by increases within the semi-detached and detached segments of the market over the quarter.
Market optimism remained throughout the course of Q4 2021, albeit during what is a traditionally quieter market period with 36% of estate agent surveyed confirming activity levels had declined from the previous quarter. However, interest levels from prospective purchasers remained strong, with 93% of survey respondents reporting heightened enquiries or levels on par with Q3 2021, leading to a buoyant number of properties attaining the ‘sale agree’ status throughout the year’s final quarter.
At 93%, the overwhelming majority of agents expect market confidence to continue into 2022, with transactional activity also expected to remain strong over the next 12 months. Prevailing inflationary pressures within the wider economy remain, however, and the 0.5% interest rate imposed by the Bank of England will undoubtedly percolate into the Northern Ireland housing market.
Lead Researcher, Dr Michael McCord, Reader in Real Estate, Ulster University said:
“The latest price statistics show a market which has remained resilient to the wider political and economic circumstances in what is traditionally a quieter period of the year.
The analysis does show a softening in price growth in comparison to previous quarters – both in annual and quarterly terms – but one which continues to display strong demand signals, and allied with ongoing supply-side challenges, does not show any signs of correcting in the immediate future.”
Michael Boyd, Deputy Chief Executive & Finance Director, Progressive Building Society, said:
“While Q4 was a quieter period overall for transactions, in line with seasonal trends, Northern Ireland’s housing market remained buoyant in the final quarter of 2021, consistent with the vibrancy we have seen throughout 2021 which has seen strong demand and increased levels of activity. A post-pandemic outlook, coupled with continued market confidence, sets the scene for a positive outlook for the housing sector in 2022, with the consensus among agents being that market buoyancy will continue in the year ahead.
There are a number of factors that may influence the success of the market in 2022 including increased inflation, the potential rise in interest rates, levels of employment and sectoral supply issues. However, a post-pandemic outlook, coupled with continued market confidence sets the scene for an active housing sector in 2022 with the consensus among agents being that strong levels of transactions will continue over the next 12 months.”
Ursula McAnulty, Head of Research at the Northern Ireland Housing Executive, which commissions the survey, said:
“The latest figures produced by Ulster University demonstrate that the demand/supply imbalance continues to prevail. Strong levels of demand and lack of supply have resulted in continued house price growth over the year – albeit at more subdued levels in Q4.
This has been particularly acute in the detached market segment, with lack of stock having upward pressure on prices. Nonetheless, Q4 data does show a softening in house price growth. Looking forward, in the longer term, the Department for Communities in their Draft Housing Supply Strategy set out a number of key objectives over the next 15 years, including increasing supply and affordable options across all tenures to meet housing need. In the shorter term, for 2022, the impact that inflation and any increase in interest rates will have on demand remains to be seen.”