Commonwealth_ The housing market in Northern Ireland saw significant growth in 2024, with average house prices increasing by 9% according to official data from the Northern Ireland Statistics and Research Agency (NISRA). By the final quarter of the year, the average house price had risen to just over £183,000, up from just over £168,000 in the last quarter of 2023. This surge in property prices marks the highest average since early 2008, shortly after the collapse of the property price bubble.
The figures, which cover nearly all sales, including cash transactions, reflect a robust housing market despite some underlying challenges. In terms of regional variations, house prices in Northern Ireland ranged from £161,000 in Mid and East Antrim to £218,000 in Lisburn and Castlereagh, illustrating significant price differences across different areas.
An intriguing development in 2024 was the slight increase in the number of houses sold, which rose to just over 23,000. While the increase indicates continued demand for housing in Northern Ireland, the rising prices suggest that there may be underlying factors contributing to this trend, especially the lack of new housing supply coming onto the market.
A major factor influencing the housing market in Northern Ireland is the restricted availability of new homes. Infrastructure issues, particularly the underfunded water system, have exacerbated the shortage of new housing construction. Plans for the construction of approximately 19,000 new homes have been delayed due to restrictions on new connections to this water system. These restrictions are impacting construction efforts in 23 towns, further exacerbating the supply issues in the housing market.
The scarcity of new homes has put added pressure on the existing housing stock, with demand outstrting supply in many areas. This imbalance between supply and demand has led to an increase in prices, as buyers compete for the limited number of properties available. For many prospective homeowners, this means higher costs and fewer affordable options, particularly in more desirable areas like Lisburn and Castlereagh, where average house prices are notably higher than in other regions.
Another contributing factor to the rising house prices is the broader economic environment. Recently, Northern Ireland’s economy has seen a degree of stability, and low-interest rates, which have remained a feature of the financial landscape, have made mortgages more affordable for many buyers. This affordability, coupled with a relatively low supply of homes, has fueled increased competition in the housing market, driving prices upward.
However, the sharp rise in house prices could create challenges for both buyers and renters. First-time buyers, in particular, may find it increasingly difficult to enter the market due to the rising cost of properties. The affordability crisis is becoming a concern for many, especially for those trying to secure their first home in a market with fewer options and higher prices.
For renters, the situation is similarly challenging. The shortage of available housing, coupled with increased property prices, could lead to higher rents in certain areas, putting additional strain on household budgets. In addition, landlords may find it more lucrative to sell their properties at higher prices rather than continue renting them out, which could reduce the availability of rental properties in the long term.
The government’s ability to address the housing crisis is becoming more critical, particularly as delays in new housing developments continue due to infrastructure challenges. The lack of a fully functional water system capable of supporting new connections is just one example of the broader infrastructure issues that need to be addressed to accommodate growing housing demands. Without substantial investment in these areas, the housing market in Northern Ireland may continue to face pressure, leading to further increases in house prices and a deeper affordability crisis for many residents.
Despite these challenges, there are ongoing discussions about how to best address the issue of housing supply. Authorities are exploring ways to streamline planning processes and incentivize construction, especially in areas where demand is most acute. However, these solutions will take time to implement, and in the meantime, Northern Ireland’s housing market is likely to remain highly competitive, with prices continuing to rise as demand outstrips supply.
The lack of new housing due to infrastructure limitations, such as the underfunded water system, continues to hinder efforts to address the growing demand for homes. As the government and developers work to find solutions to these issues, it remains to be seen how the housing market will evolve in the coming years.
