Property: Supply and Demand in Northern Ireland

marathonic

Are there any statistics available regarding past trends in the number of property listings on PropertyPal?

I see that there now appears to be 19,174 properties listed.

Based on the Northern Ireland Residential Property Price Index, there were a total of 4,827 verified transactions during Q4 2013.

This would appear to suggest that there is about 12 months worth of property on PropertyPal.

Of course, this calculation is overly simplistic and a lot of the properties sold never make it to PropertyPal and, in some cases, don't even make it to an estate agent.

It also doesn't consider that there are some legacy listings that were entered many years ago and are still listed at boom-time prices.

However, and this is the main reason for this post, I think it'll be interesting to see if, with the release of future Northern Ireland Residential Property Price Index reports, the increasing or decreasing of sales volume is matched with a corresponding increase or decrease in the number of listings.

Basically, are there going to be enough new sellers to satisfy the demand as old properties are taken off the market.

marathonic

19/02/2014 NIRPPI Report Volume (Q4 2013): 4,827
21/02/2014 www.propertypal.com properties: 19,174


<Reserved for Future Report Details>

motorguy

marathonic wrote: »

Basically, are there going to be enough new sellers to satisfy the demand as old properties are taken off the market.

And therein lies the basis for price increases - more buyers than properties.

Supply and demand and all that.

A.L.D.A

Perhaps better to consider the year on year increase (or decrease) in the NI population and also try to work out how many of the existing housing stock need to be radically repaired or demolished and rebuild each year just to maintain existing numbers.

Then add to that mix the many redevelopments for social housing that are replacing less houses than they are demolishing. IMO we are running a serious shortfall and have been for the eternity of this recession.

There is another factor and that is the market price for houses and the cost to build. For developers to build there needs to be some potential profit and the necessary liquidity. Building costs are not falling.

We can all debate how this plays out. If we continue on the current course there will either be an increase in the numbers homeless and in emergency accommodation or more shared households.

It does not necessarily mean that there will be a significant increase in house prices as that would require an increase in disposable income, but it does tend towards an upward pressure.. It could simply mean a lower percentage will own their homes, will buy later in life, and, or an increase in houses where you have three and four generations of the same family, which is fine if the building is large enough, but produces overcrowding if it is not. A step down the ladder as our economy heads in the direction of the 3rd world.

There are also shortages in specific sectors, sheltered housing for the elderly, the more affordable one bedroom flats that we all once despised etc.

Would I sell a house just yet. I think I would wait a bit as increases are probably more likely than decreases. Would I sell a building site definitely NO.

Mistral001

I would not even attempt to analyse the figures on property websites. Some houses are put up for sale with their owners having little or no hope of selling them at their desired price and could be on the market for years. After all it does not do the property sites any harm to have lots of houses for sale even if they have been listed for years.


In my view there is an over-supply of houses but not an over-supply of houses on the market.

marathonic

I realise that there are many measures that can be used to track housing statistics and demographics and population has a lot to do with it. Tracking them all is really outside the scope of any thread.

Also, whilst I agree that some properties on the websites aren't for sale or are listed at a price that make them unsaleable, I still think it would be interesting to track the number of listings versus the number of verified transactions in isolation.

Whilst these numbers certainly don't provide the whole story, they do provide useful information about the market and can be used, together with other relevant information, to develop your own opinions as to where the market is going.

A.L.D.A

So you are hoping to get a handle on the here and now, and trends in the short term availability and demand rather than long term factors.

Could be interesting.

As Mistral001 has pointed out there are properties listed, for various reasons, but there is little serious intention to sell. That would suggest that real availability is less. On the other side of the equation there are those who would like to sell, but cannot because they are in negative equity, or are waiting for signs of increased prices. If prices rise availability may increase? However if someone sells a house, in most cases, I assume they then need to occupy another so demand also increases. Very fluid set of interactions. Interesting!

marathonic

Yeah, it's going to be interesting where the supply comes from. We all know that the demand will come primarily from those approaching and age where they are able to enter the market as first time buyers, i.e. those that weren't burned by buying at 2007 prices. I honestly don't know the story with supply. Where is it going to come from?

Those in negative equity can't really sell now and let's say, for example, they are £50,000 in negative equity and prices rise by £20,000. Are they going to sell and still owe the bank £30,000 or are they going to hold tight and hope for further rises? I imagine the second is the more realistic option.

I also imagine rising prices will make those in negative equity more motivated to keep up with mortgage payments - why risk the bank repossessing and selling at a knockdown price when your house might be worth 10% more next year? Will this result in a decrease in repossessions and, therefore, restrict another one of the supply sources?

Will the supply come from new builds? New builds come at a premium and there is usually people willing to pay this premium. However, my house is now worth about £85 per square foot. That's not far off what it would take to build it without even factoring in the cost of land. Prices will need to rise a good bit from here before new builds cause any significant downward pressure on prices.

Of course, you have the properties coming on the market from old people who are trading down or passed away. But demographics will play a part here with people living longer than they did a decade or more ago.

A.L.D.A

We are building (completing) about 8500 a year which is low. Not clear what the figure is for new starts. Not aware of significant improvement.

Back in 2011 there were 55,000 vacant properties in NI of these 35,000 were unfit for occupation. If we are to see a stable supply end over the next 5 years I believe that part of the solution is to address this.

Secondly probably the biggest area of demand is suitable houses for the elderly, sheltered housing. If more were available it may free up family homes that have become too large for an elderly aging to maintain.

Mistral001

A.L.D.A wrote: »

Back in 2011 there were 55,000 vacant properties in NI of these 35,000 were unfit for occupation. If we are to see a stable supply end over the next 5 years I believe that part of the solution is to address this.

I suspect many of those 35,000 have very minor defects which might make offcialdom class them as unfit, such as a leaky gutter causing dampness, a broken boiler, or a toilet that will not flush etc. Perhaps one could address a lot of the problems with a spanner and a some sealant!! Call me a cynic or what?

tara747

A.L.D.A wrote: »

We are building (completing) about 8500 a year which is low. Not clear what the figure is for new starts. Not aware of significant improvement.

Back in 2011 there were 55,000 vacant properties in NI of these 35,000 were unfit for occupation. If we are to see a stable supply end over the next 5 years I believe that part of the solution is to address this.

Secondly probably the biggest area of demand is suitable houses for the elderly, sheltered housing. If more were available it may free up family homes that have become too large for an elderly aging to maintain.

55,000 vacant properties and we're building 8,500 a year? I'd say the supply side is holding up all right.