House prices are continuing to rise in the Derry and Strabane area as demand grows despite rising inflation and living costs, according to the latest research from Ulster University.
Findings from the Quarterly House Price Index reveals Derry and Strabane witnessed the largest price increase (17.1%) over the first quarter of 2022, taking its average house price to £147,657.
Derry and Strabane tops the 11 local government districts across the North for housing price growth, followed by Causeway Coast and Glens which saw an increase of 12.5% taking its average house prices up to £200,467, and Antrim and Newtownabbey which saw an increase of 10.7%, taking its average house price up to £176,788.
Despite this market buoyancy, housing experts are warning rising living costs and inflation are already breeding uncertainties, and will present challenges in the longer-term, including softening demand which will subsequently impact housing prices.
The Quarterly House Price Index, produced by Ulster University in partnership with the Northern Ireland Housing Executive and Progressive Building Society, analyses the performance of the Northern Ireland housing market during the first quarter of 2022 (January – March).
Across the North more widely, there has been a price growth of 2.3% for the first quarter of 2022, with annual price increases equating to 9.7%. The overall average price of residential property now stands at £202,325, as high viewing levels continue to drive a spike in agreed sales.
Moving into the next quarter of 2022, more than half (53%) of estate agents anticipate further price inflation, with the remaining 47% anticipate that pricing structures will remain consistent with the first quarter of the year.
According to the research, the two defining factors influencing NI’s housing market throughout 2022 will continue to be market resilience and acute supply shortage, a finding shared in the previous quarterly report.
Other key report findings include:
The terrace / townhouse sector has exhibited the highest annual price change of 13.2% compared to Q1 2021, with the semi-detached and detached sectors showing annual price growth of 7.1% and 4.2% respectively;
The escalation in raw material pricing over the last 12 months and continued uncertainty on future movements in material pricing make it difficult to price future work and this, allied with skilled labour shortages, has caused a dramatic slowdown in the pace of new builds being released to the market;
The lack of quality stock – particularly detached family homes within the mid-range (£200,000-£300,000) pricing bracket – is an acute problem.
This latest survey indicates a residential property market that continues to exhibit increasing activity levels, which are translating into price growth, particularly within the middle pricing tier of the market, and one which is underpinned by the lack of quality stock coming onto the market which is culminating in buyer competition and forcing buyers to pay higher premiums.
Introducing the findings, lead researcher Dr Michael McCord, Reader in real estate valuation at Ulster University, said: “The housing market has continued to see price growth entering the first quarter of 2022.
"This has not only been driven by continued demand and sales completions, but as a consequence of the ever-increasing supply crunch which has emerged over the past four quarters, which is distorting normal market operations and imbalance.”
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