New listings slump driving up prices as demand fails to be met

Northern Ireland’s housing market enters 2022 with the same challenges that persisted for much of last year – insufficient supply of homes to meet buyer demand and house prices rising beyond the grasp of many as a result. That’s according to results from December 2021 RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Residential Market Survey.

A continued shortage of new properties being listed for sale was the most prominent theme of the latest survey. In addition to pushing prices higher, this also curtailed sales despite new buyer enquiries continuing to increase.

In December, 60% more NI respondents reported a rise in the number of new buyers looking for a property. The rise in newly agreed sales was more modest with a net balance of 9% of respondents reporting an increase. This is not surprising, as respondents reported a decline in new properties coming onto the market for the sixth consecutive month.

This imbalance between demand and supply is currently underpinning growth in house prices. Indeed, in December, 80% more NI respondents reported a rise in house prices, and +49% anticipate prices to rise over the next three months too.

As NI surveyors look ahead towards the spring season, they do foresee a more upbeat outlook for sales, though, with a net balance of +28% expecting sales to return to growth over the coming three months.

Samuel Dickey, RICS Northern Ireland Residential Property Spokesman, says: “Despite changes to stamp duty and interest rate rises in the second half of 2021, new buyer enquiries remained strong to the end of the year. However, a lack of stock continues to be the issue highlighted by surveyors as both holding back sales and pushing up prices. That said, there is a suggestion that there is scope for transaction numbers to edge up over the next few months.”

Terry Robb, Head of Personal Banking at Ulster Bank, said: “We saw strong mortgage demand through 2021 and continue to offer 95% mortgages and a range of green mortgages this year. Indeed, we have extended our Green Mortgage offering to buy to let properties. Customers remortgaging or purchasing a Buy to Let property that has a valid Energy Performance Certificate rating of A or B are now being offered discounted 2 year and 5 year fixed rate Buy to Let mortgages.”

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