09/03/10 - Housing recovery will continue to be a slow one

There will be no rapid revival for the Northern Ireland housing market as the local economy is set for a slow and uneven recovery, the RICS (Royal Institution of Chartered Surveyors) says.

Commenting on the latest Ulster Bank sponsored RICS housing market survey for Northern Ireland, the organisation’s spokesman, Tom McClelland, says that although housing market transaction levels are rising, they will continue to do so at slow rates.

This he points out, will likely be the case for some time to come, with economic growth set to be sluggish and significant challenges such as public sector spending cuts on the horizon.

Mr McClelland comments: “The housing market, like the economy, is in recovery mode. However, like the economy, recovery in the housing market is going to be slow.”

“Housing transaction levels, which are the most important factor in the housing market recovery, are rising, but at a marginal rate, and are still a long way off what you could call normal levels.

“In terms of prices, there continues to be some movement, but we anticipate that average house prices will be broadly flat over the course of the next couple of years. However, there will be variations and there are risks,” he continues.

Derek Wilson, head of lending products at Ulster Bank, says: “It is true to say that anyone hoping for strong price growth in the near future will likely be disappointed, but It will be encouraging for those seeking to purchase a home that the market is moving increasingly away from what were abnormal market conditions and into a period of greater stability.”

A net balance of 30 per cent of Northern Ireland chartered surveyors responding to the RICS housing market survey reported rising transaction levels in the February survey.

A net balance of 70 per cent say that they expect transaction levels to rise further over the next three months.

In terms of prices, 60 per cent of respondents report that they have been unchanged over the past three months, with 5 per cent saying that were up and 36 per cent down.