Average house price drops to under £120k

There has been a record number of transactions over the three months to June. (file pic: Anthony Devlin/PA Wire)
There has been a record number of transactions over the three months to June. (file pic: Anthony Devlin/PA Wire)

The average house prices in Derry and Strabane has dropped by several thousand pounds over recent months, a new study has found.

Ulster University’s latest Quarterly House Price Index report analysed the local market in the city and district between April and June 2017.

The findings reveal an overall average house price of £118,627, down from £122,230 for the first three months of the year.

This is despite the number of transactions over the three months to June being the highest recorded level since the property crash ten years ago.

The average price locally for a home is now just under £30,000 less than the Northern Ireland average of £148,499, which is also down slightly from £150,050 in the first three months of the year.

Ulster University’s research is produced in partnership with the Northern Ireland Housing Executive and Progressive Building Society.

The research showed a number of factors could be behind this outcome including the mix of properties by type and age in this survey, and wider macro-economic and political factors.

Uncertainty arising from Brexit, the outcomes of the UK general election, the present lack of agreement on the formation of the Northern Ireland Executive, slower growth rates in the national and local economy and a number of pessimistic economic forecasts over the short to medium term are all recorded as contributing factors.

Lead researcher, Professor Stanley McGreal from Ulster University said: “This latest survey has mixed messages regarding the health of the Northern Ireland housing market - transaction levels are high suggesting a strong market in the second quarter of 2017, however, this optimism is not reflected in average prices which are generally more subdued.”

Michael Boyd, Progressive Deputy Chief Executive and Finance Director added: “There is no doubt that wider economic and political factors are having an impact including uncertainty following the triggering of Article 50, wage growth lagging behind inflation and the potential for the rise in interest rates.

“However as one of the most affordable regions of the UK, confidence remains within the sector and this is supported by affordability, a stable local labour market and economic growth of 0.3% in the early part of 2017. Just how the external political and macro-economic issues play out remains to be seen but it is clear that these will be reflected in the level of growth of the local housing market in the months ahead.”

Karly Greene, Head of Research and Equality at the Housing Executive, said: “Although the most recent report indicates a slight fall in average house prices by comparison with the equivalent period in 2016, it is important to bear in mind the wider context.

“The ongoing political and economic uncertainty mean there is relatively little impetus for house price growth, but the strong level of transactions suggests that the current pricing structure in the market is enabling many households – particularly first time buyers – to purchase homes at affordable prices.”