As you know, last month I had an interesting chat over coffee with an investor keen for my sage advice on purchasing an apartment in the Titanic Quarter.
As it happens, this chat took place close to the 14th February, so the conversation soon turned to the inevitable.
That's right - NISRA published the latest Northern Ireland Housing Price Index figures that morning. Why, what were you thinking of...?
Not desperately romantic perhaps, but the Northern Ireland property market is still feeling the love, albeit cautiously. We’ve had our hearts broken before, after all.
Last time, we reported on the 0.8% rise in house prices between Q2 and 3 2016. The figures for Q4 include revisions, based on sales information received by HMRC since the last publication. The figure has been revised down, but there was still a price rise of 0.6% between the second and third quarters.
And the picture remained steady towards the end of 2016, with a further 0.6% house price increase between the third and fourth quarters. The annual change between Q4 2015 and Q4 2016 was a healthy 5.7%.
Having slipped 0.9% between the second and third quarters, the last quarter of the year saw a move in the right direction for Belfast, with house prices moving up 0.1%. OK, it’s negligible, but it’s still going in the right direction.
That 0.1% coincided with a 5.73% drop in the city's property sales between Q3 and 4 – but as we mentioned earlier, lower sales are to be expected in the last quarter of the year.
We took a quick look at verified residential property sales in Q4 2015 compared to Q4 2016, to see how price changes compared to the level of sales.
Price elasticity is an economic term, used to describe how responsive buyers are to price changes.
So, the figures comparing Q4 in 2015 and 2016 appear to show a high degree of elasticity – prices rose by 5% over that 12 months, but there was a drop in demand of 18%.
But as we all know, price is never the sole influence on demand – as mentioned, 2016 wasn’t exactly a quiet year in this part of the world, and with uncertainty over Northern Ireland’s post-Brexit future coupled with a weak pound, a general sense of buyer caution is inevitably reflected in property transactions.
Belfast prices have risen by nearly 5% over the past year, falling below the region’s overall performance, with NI house prices rising by 5.7%. We’re not too far behind – around the middle of the table compared to the other regions.
Out and about in Belfast recently, I was struck by the buzz of industry in the city centre – everywhere I looked you could see cranes and construction sites. So, while there’s caution in the market, there also seems to be investment and optimism too.
We’ll be sharing some insights and analysis on Belfast’s booming future in another post coming soon – watch this space!