Skip to main content

Northern Ireland Property Crash In Full Swing...

In today's Sunday Buisness Post, Post David Cullen in Belfast reports, on the Property scene in Northern Ireland...


"North facing property crisis as house values take a hammering...


The deepening crisis in the North’s residential property market is highlighted by figures showing a near 19 per cent slump in values in the year to the end of June.

The survey, by Nationwide building society, also showed that prices had dropped by 9 per cent in the second quarter of this year - the steepest correction in property values recorded across Britain and the North.

The downturn comes on the back of an unusually sharp jump during 2006 and 2007, when prices grew by almost 80 per cent.

‘‘These increases were clearly not sustainable and left the market particularly vulnerable to external shocks, such as the financial downturn that began last August,” said Fionnuala Earley, chief economist of Nationwide. ‘‘We are now seeing the consequences of that excess vulnerability.”

The average price of a house in the North now stands at around £183,000 (€230,000) against around £215,000 (€270,000) a year ago.

Ulster Bank’s North economist, Richard Ramsey, said the rapid gains in house prices were unsustainable and that the subsequent correction had been accelerated by the credit crunch.

‘‘House prices appear to be returning back towards pre-boom levels, with a number of estate agents confirming that they are now valuing houses at 2006 prices,” he said.

‘‘While this represents a significant drop of over 25 per cent on last year’s peak, these falls must be put in context. The latest figures remain some 50 per cent above the level of two years ago and have more than doubled over the last five years.”

Property experts said that the North’s housing boom had been largely investor-driven and that this had helped to squeeze out the first-time buyer.

With fewer buyers in the market, hard-pressed developers were being forced to offer heavy discounts while adding full turnkey packages, paying stamp duty and legal costs, or subsidising mortgage payments for up to three years.

Some first-time buyers were being offered the chance to pay for 75 per cent now and the rest in several years’ time.

The volume of house sales has also plummeted. According to the latest University of Ulster quarterly house price index, produced in partnership with Bank of Ireland, just 896 transactions from almost 120 estate agents were registered between January and March, compared with 2,120 in the same period a year ago.

This was the lowest number of quarterly house sales recorded since the survey started in 1984.

‘‘The low level of housing transactions has seen mortgages fall in the first quarter of 2008 to their lowest level since the late 1970s,” said Ramsey.

‘‘Clearly, the ongoing credit crunch is making life more difficult for borrowers and lenders alike, and the trend in falling average house prices is expected to continue in 2008.”

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu

I fear a very different kind of property crash

While 80% of people over 40 own their own home just a third of adults under 40 do. This is disastrous for social solidarity and cohesion Changing this system of policymaking requires a government to act in a way that may be uncomfortable for some. Governments have a horizon of no more than five years, and the housing issue requires long-term planning. The Department of Public Expenditure and Reform was intended to tackle some of these problems. According to its website its remit is to “drive the delivery of better public services, living standards and infrastructure for the people of Ireland by enhancing governance, building capacity and delivering effectively”. So how is the challenge of delivering homes for people in 2024 and beyond going to be met? The extent of the problem is visible in the move by companies, including Ryanair, to buy properties to house staff. Ryanair has, justifiably, defended its right to do so. IPAV has long articulated its views on how to improve supply an

Property Tycoon's Dolce Vita Ends...

Tycoon's dolce vita ends as art seized... THE Dublin city sheriff has seized an art collection and other valuables from the Ailesbury Road home of fallen property developer Bernard McNamara. The collection will be sold to help pay his debts. The sheriff, Brendan Walsh, is believed to have moved against the property developer within the past fortnight, calling to his salubrious Dublin 4 home acting on a court order to seize anything of value from his home to reimburse his creditors. The sheriff is believed to have taken paintings from the family home along with a small number of other items. The development marks a new low for Mr McNamara, once one of Ireland's richest men but who now owes €1.5bn . The property developer and former county councillor from Clare turned the building firm founded by his father Michael into one of the biggest in Ireland. He is the highest-profile former tycoon to date to be targeted by bailiffs, signalling just how far some of Ireland's billionai