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04/07/2007
Rising house prices ‘taking toll’ on incomes
A new report has revealed that rising house prices in Northern Ireland are taking their toll on borrowing and savings.
The report, produced by PricewaterhouseCoopers (PwC) showed that the monthly mortgage repayments in the province are now 150% of the average weekly take-home pay – almost twice the level of a decade ago.
In 1997, local property prices were around four times annual earnings, on a par with the rest of the UK.
However, they have now soared to nearly 9.5 times annual earnings – 16% above the rest of the UK. With NI average wages just over 80% of the UK average, rocketing prices are beginning to take their toll on disposable incomes.
Philip McDonagh, Chief Economist with PwC in NI, said: “While the local economy continues to perform reasonably well, households are facing a financial squeeze due to a combination of modest earnings growth, rising domestic rates and utility bills, higher petrol prices and increased debt repayment costs.
“As a result, the amount of money left over to spend on other goods and services has grown much more slowly than headline indicators like GDP might suggest.
“Looking ahead, rising debt service will contribute to slower consumer spending growth over the next two-three years and this will impact the services sector, which has underpinned economic growth in recent years.”
(JM)
The report, produced by PricewaterhouseCoopers (PwC) showed that the monthly mortgage repayments in the province are now 150% of the average weekly take-home pay – almost twice the level of a decade ago.
In 1997, local property prices were around four times annual earnings, on a par with the rest of the UK.
However, they have now soared to nearly 9.5 times annual earnings – 16% above the rest of the UK. With NI average wages just over 80% of the UK average, rocketing prices are beginning to take their toll on disposable incomes.
Philip McDonagh, Chief Economist with PwC in NI, said: “While the local economy continues to perform reasonably well, households are facing a financial squeeze due to a combination of modest earnings growth, rising domestic rates and utility bills, higher petrol prices and increased debt repayment costs.
“As a result, the amount of money left over to spend on other goods and services has grown much more slowly than headline indicators like GDP might suggest.
“Looking ahead, rising debt service will contribute to slower consumer spending growth over the next two-three years and this will impact the services sector, which has underpinned economic growth in recent years.”
(JM)
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