Posted on Tuesday 14 August 2012 by Ulster Business

Property signs

Northern Ireland’s housing market downturn is five years old, according to the latest survey by the Royal Institution of Chartered Surveyors (RICS) and Ulster Bank.

July 2012 was the 60th month in succession that the survey reported a price balance below zero.

The price balance indicates whether prices on average are rising or falling – with a price balance below zero indicating that they are falling.

RICS said that on average house prices had dropped by between 50% and 60% since the peak of the housing bubble in mid-2007.

An overwhelming 68% of respondents to the survey last month said that prices had fallen again, with none saying that prices had risen and 32% saying that they remained the same.

However, it does appear prices have reached a level that is encouraging some movement in the market, with 38% of surveyors saying they had seen an increase in transactions in July, none saying they had gone down, and 62% reporting no change.

More of those surveyed thought prices would fall in August, September and October, but a balance of 8% also felt that transactions would rise in the same three month period.

August 2007 was the first month that the survey reported a price balance below zero, indicating that prices had started to fall. Surveyors had however been reporting that price growth had been easing for several months prior to August 2007 and that they expected prices to begin falling.

Commenting on the latest outcome, RICS Northern Ireland housing spokesman, Tom McClelland, said: “After a large price correction since mid-2007, we are now seeing examples of properties selling at prices last seen in the early 2000s. On average, the price correction is between 50% and 60%, with properties in some instances selling at prices that reflect a correction of significantly more than this. Despite this dramatic improvement in affordability however, activity in the market remains constrained by wider economic conditions and fears about job security.”

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