There has been a downshift in sentiment in the Northern Ireland housing market due to uncertainty fuelled by the EU referendum vote coupled with the impact of the higher stamp duty now in place on investment property purchases, according to the latest RICS and Ulster Bank Residential Market Survey.
The overall price balance for Northern Ireland, whilst still positive at +4 percent, fell to its lowest level in more than three years. Expectations for prices over the next three months also fell; indeed the balance for price expectations (-6 percent) went into negative territory for the first time since May 2013.
In terms of sales activity, Northern Ireland surveyors reported a rise during June off the back of a sharp slowdown in May. However, expectations for sales activity over the next three months (a net balance of +1 percent) are at their lowest since October 2012.
In relation to demand, new buyer enquiries fell for the third month in a row, according to surveyors (a net balance of -7 percent). However, there is also little growth in new instructions to sell.
The RICS Residential Market Survey gives an early indication of what is happening in the market, and it is not surprising that the uncertainty in the wider economy is impacting on housing market sentiment in some areas.
However, only after the initial shock of the past couple of weeks has passed will we get a clearer picture of how the market is faring. A lack of supply has characterised the Northern Ireland housing market in recent years, particularly in Greater Belfast and this should continue to be a factor.
The first half of 2016 was a relatively strong six months in terms of housing market demand in Northern Ireland. And the imbalance between supply and demand in key population centres put upward pressure on prices. Unsurprisingly, there is uncertainty in the wider economy and the housing market cannot be immune. However, we continue to see good mortgage demand from homebuyers, and the key thing for them remains to secure finance that is affordable and meets their own circumstances.