East Belfast Sectoral Study - Northern Ireland Housing Executive

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10. Conclusions 10.1 The overall conclusion is that the East Belfast housing market in the second quarter of 2006 was an extremely buoyant market with price levels escalating upwards on the basis of high demand levels. 10.2 In relation to price levels the following summary points can be drawn: • extremely high rates of increase amounting to on average a 20- 30% increase since the start of 2006 • terraced houses have experienced the brunt of the price growth followed by semi-detached houses • the market is considered to be hot across all of East Belfast with previously unfashionable locations Sydenham, Bloomfield, Cregagh performing strongly • traditionally higher price levels of BT 4 still remain • first-time buyers are seen to be increasingly stretching themselves to purchase in the highly buoyant market • unsustainable rates of price growth, though prices are still likely to rise due to the level of demand. 10.3 Concerning demand a number of key factors arose: • exceptional rates of demand estimated to be two to three times greater than in 2005 (which was not a slack year for the housing market) • two main purchaser groups were identified namely first-time buyers and investors • the main housing type in demand was terraced houses • demand has been significantly enhanced by an influx of purchasers from outside of East Belfast in particular those firsttime buyers priced out of the South Belfast market • evidence of movement into the East Belfast market from further a field and throughout Northern Ireland • internally generated demand is also strong with some evidence of local purchasers having to look beyond East Belfast • co-ownership price thresholds are rapidly being eroded in East Belfast and need to be reviewed • co-ownership purchasers have difficulty in competing in the rapidly rising market and due to additional administrative requirements are often outbid • trading-up is still a very important component of the market and frees up housing for the aggressive first-time buyer and investor market. 10.4 On the supply-side the key issues to emerge were: • the level of sales is higher than in the previous year • supply of existing property onto the market was good 50
• property is selling very quickly, frequently within a few days of listing, hence the (false) perception that supply is lower • those selling are mainly house-holders trading-up through the normal process of market activity • dissolution of households either through divorce or elderly going into care homes is a secondary source within the existing market • there is evidence of a strong desire to remain within East Belfast with most households trading-up wishing to remain in the area though some have moved out to either capitalise upon the high price levels or being outbid in the market • new build supply is predominately within the urban footprint, East Belfast is seen to be highly constrained in terms of greenfield development • there was a concern that most of the key brownfield sites have been developed with future supply-side implications • planning policy was seen to be contradictory with the need to re-open the greenfield/brownfield debate • the proposed Titanic Quarter was seen to have produced positive spin-offs into the neighbouring Sydenham area but apart from this was seen to be a different market and more city centre orientated rather than East Belfast • the resale of ex-Housing Executive is an important component of the existing market with first-time buyer and investor appeal. 10.5 The buy-to-let market was seen as a new activity and raised a number of important issues: • impact on the home-ownership market through investors bidding-up price levels, out-competing first-time buyers and potentially reducing supply coming back on the market • the relatively strong presence of investors has meant that the supply of private rental accommodation in East Belfast is good • demand for private rental accommodation, although a growing market with requirements from a number of sources, was seen to be still restricted and not on the scale of the South Belfast market • rental levels were considered to be insufficient to give appropriate returns with investors holding for capital growth purposes. 10.6 In summary there are currently market imbalances in the East Belfast market with contrasting perspectives between the home-ownership market and the buyto-let sector. The former has an imbalance of demand and supply driven by excessive rates of demand during the first half of 2006 and a supply-side which is inelastic in the response to such demand-side pressures. Hence the rapid growth in price levels reported by estate agents. In contrast, for the buy-to-let sector the imbalance is in the opposite direction with supply outstripping 51
Page 2 and 3: TABLE OF CONTENTS 1.0 Introduction
Page 5 and 6: 2.0 Strategic Context 2.1 Backgroun
Page 7: exacerbating land and property pric
Page 10 and 11: interface around Short Strand/Bally
Page 12 and 13: proposals to create a network of Qu
Page 14 and 15: Knock and Orangefield Wards have th
Page 16 and 17: environment and crime and crime and
Page 18 and 19: area, 1653 in the Belfast City port
Page 20 and 21: years. The current affordability cr
Page 22 and 23: Most areas are experiencing increas
Page 24 and 25: the growing interest in buy to let
Page 26 and 27: 5.0 Private Sector Market Perspecti
Page 28 and 29: Property Type Average Price 2005 Qu
Page 30 and 31: continue in the longer term, the fa
Page 32 and 33: 32 July 2006
Page 34 and 35: 1. Introduction and approach to the
Page 36 and 37: changes to the education system in
Page 38 and 39: significant in the re-branding of S
Page 40 and 41: though one major agent with an exte
Page 42 and 43: that the current price thresholds f
Page 44 and 45: scheme. The scheme is attracting yo
Page 46 and 47: sector for at least the short-term.
Page 48 and 49: 8. Relationship of East Belfast mar
Page 52 and 53: demand and keeping rental levels do
Page 54 and 55: Appendix 2 Northern Ireland Housing

East Belfast Sectoral Study - Northern Ireland Housing Executive

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