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11/08/2009
House Prices Fall 'To Continue'
According to an expert who predicted the 'crash' of two years ago, NI property prices have further to fall.
Jonathan Davis, a financial planner based in the City of London, told the Belfast News Letter last night that property here remained severely over-valued in relation to incomes, and that buyers should be "wary of talk of green shoots".
But the Royal Institution of Chartered Surveyors (RICS), who report "increasing stabilisation in house prices", cautioned against "alarming predictions" of major price falls.
Mr Davis, however, pointed out that he is one of the few pundits who forecast the housing crash at the height of the boom when many commentators were predicting continuing growth, or at worst a "soft landing".
Mr Davis said then that prices would plunge by half, which has nearly happened, according to the leading property price surveys.
Average NI house prices have dropped by 40% from the peak, in 2007.
"I think that they will halve from current levels so that they are 70% lower than the peak, in other words, they fall to 30% of peak value."
The Managing Director of Armstrong Davis, said: "House prices may appear to have stabilised in recent months but I believe they will restart their downward trend, which began in late 2007.
"House prices have to return to economic reality. By 2006 and 2007 they had lost any relationship to reality, such as average salaries and wages.
"Northern Ireland was the most overpriced region in the United Kingdom and that is why it has experienced the biggest fall so far and why it will continue to fall further than any other regions, before it reaches the bottom in 2011 and 2012."
Mr Davis spoke out following the latest survey from the RICS, which found that the proportion of chartered surveyors reporting price falls is at its lowest level in nearly two years.
The majority of local chartered surveyors responding to the survey said that prices will remain flat in the three months ahead.
However, RICS Northern Ireland housing spokesman, Tom McClelland, said in response to Mr Davis's forecast of house prices halving: "Nobody knows, but I think his prediction is a bit pessimistic."
(BMcC/KMcA)
Jonathan Davis, a financial planner based in the City of London, told the Belfast News Letter last night that property here remained severely over-valued in relation to incomes, and that buyers should be "wary of talk of green shoots".
But the Royal Institution of Chartered Surveyors (RICS), who report "increasing stabilisation in house prices", cautioned against "alarming predictions" of major price falls.
Mr Davis, however, pointed out that he is one of the few pundits who forecast the housing crash at the height of the boom when many commentators were predicting continuing growth, or at worst a "soft landing".
Mr Davis said then that prices would plunge by half, which has nearly happened, according to the leading property price surveys.
Average NI house prices have dropped by 40% from the peak, in 2007.
"I think that they will halve from current levels so that they are 70% lower than the peak, in other words, they fall to 30% of peak value."
The Managing Director of Armstrong Davis, said: "House prices may appear to have stabilised in recent months but I believe they will restart their downward trend, which began in late 2007.
"House prices have to return to economic reality. By 2006 and 2007 they had lost any relationship to reality, such as average salaries and wages.
"Northern Ireland was the most overpriced region in the United Kingdom and that is why it has experienced the biggest fall so far and why it will continue to fall further than any other regions, before it reaches the bottom in 2011 and 2012."
Mr Davis spoke out following the latest survey from the RICS, which found that the proportion of chartered surveyors reporting price falls is at its lowest level in nearly two years.
The majority of local chartered surveyors responding to the survey said that prices will remain flat in the three months ahead.
However, RICS Northern Ireland housing spokesman, Tom McClelland, said in response to Mr Davis's forecast of house prices halving: "Nobody knows, but I think his prediction is a bit pessimistic."
(BMcC/KMcA)
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