‘Psychology of COVID’ responsible for house moving frenzy

A housing expert says the psychology of a population coping with the pandemic lies behind the house moving frenzy of recent months.

Dr Michael McCord, Reader in Real Estate at Ulster University, made the observation in response to the latest Northern Ireland house price index.

This reveals an overall average house price of £195,242 reflecting 9.2 per cent annual growth.

This growth remains driven by increased activity, particularly within the semi-detached and detached segments of the market.

There were 4,138 transactions in the second quarter of the year, substantially higher than the 2,829 reported in Q1 2021 and the 570 presented in Q2 2020 due to the market closure.

McCord says: “The psychological effect of the COVID-19 pandemic upon the housing market is well and truly discernible, with the race for space clearly evident. 

“Indeed, in the first quarter of 2021 we noted the increased competition amongst buyers, with viewings instantaneously translating into firm offers and trading up activity. Moving into the second quarter of the year, this trend has firmly continued with increased house prices and transaction levels.”

Michael Boyd of the Progressive Building Society - which prepares the Northern Ireland house price index along with Ulster University- comments: “Despite the economic challenges of Covid, the resilience, affordability and changing patterns has seen momentum and confidence continue within Northern Ireland’s housing market throughout the first half of 2021 with the highest level of transactional volumes seen since 2007. 

“While the soon to be phased out stamp duty holiday has been an important contributory factor, further easing of restrictions and a better than expected economic outlook augers well for the market in the coming months with transaction volumes expected to remain consistent with the first half of the year.

“The longer-term picture, however, must account for the end of the furlough scheme with the Northern Ireland Executive and the UK Government playing an important role in leading the policy environment to support economic investment and drive consumer confidence.”