The number of homes coming onto Northern Ireland’s housing market has fallen at the fastest rate seen since 2020 according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
A net balance of -52% of NI respondents reported a fall in new instructions to sell in the May report, indicating a decrease in the number of new properties coming to the market. This is the fourth consecutive month this balance has been in negative territory, and the lowest it has been reported since March 2020.
Demand from new buyers also took a dip through May. A net balance of -31% of surveyors in NI reported a fall in new buyer enquiries, down from 27% in April.
With demand and supply falling, it is unsurprising that surveyors noted a fall in sales through May. A net balance of -19% of NI respondents reported a decline in sales. This is the first time this balance has been negative in nearly two years.
In saying that, surveyors remain positive on the sales outlook, with a net balance of 30% of respondents anticipating that sales will pick up again over the next three months as we move further away from the recent stamp duty change. Anecdotally, surveyors note that the market was busier before the change came into effect.
When it comes to pricing, respondents continue to point to an upward trend. A net balance of 92% of NI respondents reported a rise in house prices over the past three months. NI continues to see the highest net balance regarding pricing when compared to other UK regions. This is perhaps unsurprising with the constrained supply.
And this trend continues looking forward as a net balance of 56% of respondents anticipate that prices will rise over the three months ahead.
Samuel Dickey, RICS Northern Ireland Residential Property Spokesman, comments: “We’ve been reporting on the challenges with limited housing supply for many months, and the results of the most recent RICS residential market survey highlight how much this is impacting the market. There are many reasons behind the limited stock coming to the market, but a lack of wastewater infrastructure, planning delays and increased costs of raw materials, amongst other factors, are limiting the amount of housebuilding activity that can go ahead. The imbalance between supply and demand, is leading to continued upward pressure on price.”
Commenting on the UK picture, RICS Senior Economist, Tarrant Parsons, said: “Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the Stamp Duty changes at the end of March continuing to weigh on buyer activity.
“However, near-term sales expectations are showing signs of stabilisation, suggesting that while muted conditions may persist in the short term, a further deterioration appears unlikely. Looking ahead, the outlook is more optimistic, with respondents anticipating a gradual recovery in sales activity over the next twelve months.
“That said, the pace and extent of any improvement will partly depend on the Bank of England’s ability to continue cutting interest rates.”