The average price of a home in Derry rose by 5.5 per cent over the past year driven by detached house sales, according to Ulster University’s latest Quarterly House Price Index report.
But although sales of plusher properties drove prices up £6,126 between the final quarters of 2016 and 2017, the average price of a terrace in Derry/Strabane rose hardly at all, the average price of a semi-detached home fell, and there were no bungalow or apartment sales worth talking about in the autumn.
Sinn Féin councillor, Colly Kelly, acknowledged the figures will be disappointing for those viewing properties as an asset or relying on rent for income. But at a time of continuing wage stagnation, Colr. Kelly said low house prices were not unwelcome for many of his constituents.
“While slow growth was a concern for those who view housing primarily as an asset, for the many young people and young families being squeezed out of the housing market by prices that don’t reflect the local labour market it is a corrective,” he said.
“In recent times increasing housing costs have outstripped wages and a shortage of social housing has pushed many families into taking on mortgage debt that they struggle to meet.
“Sinn Féin have long campaigned for the need to develop social housing on available land, particularly in areas of high objective need and we need real investment in social and affordable housing for those people in need,” he added.
The Ulster University research analysed the performance of the housing market during October, November and December 2017.
It found that in Derry/Strabane, the average price of a home (£117,989) was higher over the year and the quarter by 5.5 per cent and 3.5 per cent respectively.
In terms of the individual property sectors, however, terraced/townhouses (£81,808) had an average price only slightly up over the year by 0.1 per cent and down relative to the third quarter by 5.3 per cent. The average price of a semi-detached house, meanwhile, actually fell to £101,812 from £109,994 in the last three months of 2016.
Moreover, in the final quarter of 2016 semi-detached bungalows in Derry/Strabane averaged £108,717 with detached bungalows at £137,192 but at the end of last year there were no sales registered.
Detached houses (£191,642) while characterised by an appreciably higher average price over the year by 21.3 per cent nevertheless dropped back in price compared to their strong third quarter performance.
Lead researcher, Professor Stanley McGreal from Ulster University said: “In terms of estate agent perceptions, there is a perspective that 2017 had been largely a good year for the local housing market, with property turning over at a reasonable rate and price levels sustained.
“This has been translated into a feeling of short-term confidence among those in the industry concerning prospects for 2018.
“However, looking at the market with a medium-term perspective, there is still considerable uncertainty as to what impact, if any, Brexit will bring and whether the likely transition arrangements will soften or defer any such impact down the line.”
Michael Boyd, Progressive Deputy Chief Executive and Finance Director added: “The local housing market’s sustainable growth in 2017 reflects the affordability that prevails both in urban and regional locations. “However, this is set against the backdrop of a relatively slow-moving year for house price growth of 1.2 per cent.
“Following a strong uplift in Q3 2017 of 8.3 per cent, Q4 saw a decline in house price sales of 3.4 per cent. “This is nevertheless compatible with seasonal trends and the overall annual picture reflects a steady and confident market last year.
“That said there are a number of factors which will influence the market’s overall performance in 2018. One of the most pressing issues remains the long-term impact of Brexit with early clarity needed for businesses on the transition period and the long-term relationship with the EU.”
Karly Greene, Head of Research and Equality at the Housing Executive, said: “The housing market trends of the last year look likely to carry on into 2018, with a healthy level of transactions, a low but sustainable level of house price growth and – importantly – continued availability of relatively affordable options for first time buyers and newly forming households.”