Northern Ireland

NI house prices 'fell each month for three years'

Houses
Image caption The RICS said a "housing bubble" which emerged between 2004 and 2007 was still being corrected

House prices in Northern Ireland have fallen every month for the past three years, according to a report.

Until 2007, its property prices were rising faster than anywhere else in Europe but since then prices have fallen in some areas by as much as 60%.

The latest report by the Royal Institution of Chartered Surveyors (RICS) suggests prices have fallen continuously since August 2007.

A spokesman said the "housing bubble has led to a big price correction".

"House prices rose significantly between 1995 and 2004, and, at that stage, economic fundamentals suggest price growth should have moderated," said Tom McClelland.

"But, instead, for a number of reasons, the opposite happened.

"This created a large price bubble between 2004 and 2007 that has been correcting."

'Squeeze'

Mr McClelland said Northern Ireland's housing market had stabilised from "when the house price correction was at its most intense".

He said some areas of the property market were in better health than others, and there were signs that investors were returning "despite the squeeze on Housing Benefit impacting on the private rented sector".

"However, unsurprisingly, the process of correction continues in areas where price growth was most out of kilter with fundamentals," he added.

Mr McClelland said impending cuts in public spending would hit the local economy hard.

"Prices have corrected significantly to date, and can only fall so far, but with people in our public sector-dependent economy fearing for job security, there remain clear risks," he said.

"That said, we expect the mid-term trend to be largely flat prices. The recovery will be a long-term one."

In its August survey, 45% of chartered surveyors questioned by RICS said prices were falling while the remainder reported no change in market conditions.

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