House prices in the north rose by 7.1% in 2024, making it the second year in a row that the cost of buying a home rose more in Northern Ireland than in England, Scotland or Wales.
According to figures from the Nationwide Building Society, the rise between December 2023 and December 2024 means the average cost of a home in Northern Ireland now stands at £197,696.
The area with the next highest rise was the north-east of England at 5.9%, followed by the north-west at 5.5%, while prices in Scotland and Wales rose by 4.4% and 2.7% respectively.
More: Home completions in north expected to fall to new 65-year low as investment drops by 20%
The rise in prices comes as it was announced that the number of new homes built in Northern Ireland last year looks set to be the lowest since 1959.
“Northern Ireland was the best-performing area for the second year running, with prices up 7.1% over the year,” Robert Gardner, Nationwide’s chief economist told the PA news agency.
“UK house prices ended 2024 on a strong footing, up 4.7% compared with December 2023, though prices were still just below the all-time high recorded in summer 2022.
“Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers.
“This is a challenge that had been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save.
“Moreover, for many of those with sufficient savings for a deposit, meeting monthly payments was a stretch because borrowing costs remained well above those prevailing in the aftermath of the pandemic.”
Mr Gardner added that changes to stamp duty – a tax paid on property and land – from April are “likely to generate volatility, as buyers bring forward their purchases to avoid the additional tax”.
Currently, first-time buyers in Northern Ireland and England don’t have to pay stamp duty on properties below £425,000 – this threshold will drop to £300,000 from April.
He predicts this will result in a spike in house purchases in early 2025, before a period of weakness in the three to six months following March.
Elsewhere, while house price rises in Northern Ireland were higher than those in Britain, prices in the Republic experienced an even greater increase.
According to a report published by Daft.ie, the average property price tag went up by 9% in the Republic last year, currently sitting at €332,109.
Prices rose in the capital in alignment with the national average, bringing the average property price in Dublin to €442,909.
“If the goal of policymakers is to ensure stable housing prices, then, this has been the least successful year for policymakers since 2017, when prices rose by roughly the same proportion,” Ronan Lyons, economist at Trinity College Dublin and author of the report, told RTÉ.
He said most owners had fixed mortgages which gave them “very little incentive” to sell, resulting in a reduced second-hand property market.
He also suggested that while there has been an increase in the number of homes built, it was still not meeting demand.
