Throwback Thursday! House Prices at 2005 Levels
So I have just returned from my Turkish holiday and just like in Istanbul ten years ago, the impossible appears to have happened. House prices in NI appear to be stabilising and are back to 2005 levels according to the Northern Ireland Residential Property Price Index.
Liverpool fans will remember 2005 for slightly different reasons but for the rest of us it is considered the last time the housing market could be described as normal. Prices doubled in the preceding two years before dramatically crashing and continuing to decline. Sound familiar, Liverpool fans?
The published figures reflect an average home price of £113 245, following a residential property price index increase of 6% between spring 2014 and June 2015. The property market has been stabilising these past two years which is great. The increase is good news for anyone looking to sell their home; however, Negative Equity is still a major concern for many homeowners across NI.
Mid-Ulster has witnessed the biggest increase, with house prices in that region going up by 10% this year. My home county of Fermanagh, along with Omagh, has struggled the most. House prices there have only increased by 1% compared to the average 6% across NI.
Those with a keen eye on the market will notice that 2005 was still two years away from the peak in house prices in 2007. This means that people who bought homes in 2007 may still be a long way off from being able to sell their house for the price they bought it for, but don’t feel trapped; it does not mean you cannot sell your property if you need to.
Finance Minister Arlene Foster has welcomed the report stating that "there is continued confidence in the housing market, which is encouraging for the Northern Ireland economy."
While it's great to see the market improving, I find it difficult to share the Minister's optimism when so many people across NI, particularly in her home county of Fermanagh where the rise and fall was most extreme, are still in Negative Equity.
The market appears to be hardening after house prices hit rock bottom in 2013, but prices are still 40% below their 2007 peak. Hindsight has shown us all that 2007 house prices were unsustainable, but it doesn’t change the fact that many people bought houses during that time.
At GDP, we welcome any signs that the market is improving but in my opinion we have little hope of seeing house values recover to 2007 levels. There is still a lot of work to be done before the Negative Equity crisis is solved for affected families in NI.
GDP are the market leaders in this area and borrowers need to continue to educate themselves and get a plan in place as there are solutions to debt problems available.