House prices in Northern Ireland are expected to be broadly flat over the next three months following a reduction in both housing demand and supply in June, according to the latest Royal Institution of Chartered Surveyors (RICS) and Ulster Bank Residential Market Survey.
A net balance of 36% of NI-based respondents stated that house prices rose over the past three months. However looking forward, a net balance of just 4% of NI respondents was recorded for price expectations over the next three months. This is in keeping with a flat picture, and comes off the back of a dip in indicators for both new buyers enquiries and agreed sales.
This compares to the national average of -55%. So, whilst local surveyors expect a broadly flat picture, their outlook is much less pessimistic than surveyors in other regions of the UK.
Regarding the demand indicators, they fell to their lowest level since mid-2020. A net balance of -47% of respondents reported lower levels of new buyer enquiries. This largely is in line with what can be seen across the UK, with the UK average sitting at -45%.
Also falling to its lowest level since mid-2020 is supply. A net balance of -48% of respondents reported a fall in new properties coming onto the market in June, down from 8% in May and 14% in April.
Meanwhile, looking at transactions, a net balance of -33% of NI respondents reported a fall in newly agreed sales, which is unsurprising with the limited appetite and stock.
The fall in demand, supply and sales may be weighing on surveyors’ outlook, with a net balance of -22% expecting sales to be lower over the next three months. This is the lowest this figure has been since January of this year. However, Northern Ireland respondents are more optimistic looking 12-months ahead. Whilst sales expectations for a year’s time are flat, prices are expected to edge upwards.
Samuel Dickey, RICS Northern Ireland Residential Property Spokesman, says: “The first half of 2023 saw relatively steady demand until June when surveyors pointed to both lower levels of new buyer enquires and new sales last month. This probably isn’t surprising given recent hikes in interest rates and changes in lenders’ mortgage offerings. Anecdotally we know though that there is quite a lot of variation in the market, with some areas of NI seeing much stronger demand than others. In my experience, where buyers are pricing properties realistically, sales continue to take place, and in some cases, we continue to see competitive bidding. This is particularly true in areas of the market and in relation to property types where supply is limited. Looking ahead, despite a range of economic challenges, NI respondents overall remain more confident about prices and activity over the next year than their counterparts elsewhere in the UK.”
Terry Robb, Head of Personal Banking at Ulster Bank, added: “For the local housing market, the first half of 2023 was overall a story of easing demand, after a very busy few years. Higher interest rates are inevitably impacting somewhat on demand. However, the lack of supply continues to be seen as a key factor in supporting prices. Whilst demand is lower than it was, in our experience, it still remains relatively healthy, and Ulster Bank is active with a wide choice of products to support borrowers, including our green mortgage which offers discounted rates when purchasing an energy efficient home. We are also offering £500 cash-back on selected products which is proving popular with borrowers.”