On this side of the Border, politicians, bankers, media, investors are all praying for a recovery in residential property prices and the venom unloaded on the recent Fitch prediction of a further 20% decline was remarkable. However, those same politicians, bankers, media and investors might do worse than to look at the actual experience of Northern Ireland and consider if Northern Ireland is indeed a pathfinder for prices in the Republic
Today, the Northern Ireland Statistics and Research Agency operating under the auspices of finance minister Sammy Wilson publishes its house price series for the three months ending 31st December 2012 – the report is available here. The headlines are – prices are down 3% in Q4, 2012 compared with Q3,2012 and are down a staggering 56.3% since the peak in Q3,2007. What is even more staggering is that UK inflation since Q3,2007 has been 18.7% and in real terms, Northern Ireland residential property is down 63.2%.
On this side of the Border, there has been some evidence of stabilization in H2,2012 though there was a decline of 1.1% in December 2012, but to date we are just 49.6% down from peak nationally and in real terms, because there has only been 1.6% inflation between September 2007 and December 2012, we are down just 50.4%, considerably less than Northern Ireland.
And remember Northern Ireland didn’t have such over-construction, and its vacancy level today is half ours. What Northern Ireland does have is a pretty savage foreclosure and repossession regime and in 2012, there were over 10 applications for repossession every single working day, compared to about 2 on this side of the Border despite us having 2.5 times the population.
And remember this is the league table of the world’s worst residential property crashes. Northern Ireland appears to be now out on its own at the top.