NI housing market update - December 2013
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Transcript of NI housing market update - December 2013
Slide 1
Northern Ireland Housing Market Update
Issued 13 December 2013
Richard Ramsey
Chief Economist Northern Ireland
Twitter @UB_Economics
Slide 2
ContentsSlide Numbers
1. Housing Market Summary 3-6
2. House Price Performance 7-20
3. UK & NI Regional House Price Performance 21-32
4. Mortgage Activity & Residential Property Transactions 33-63- Negative equity, consumer stress, student debt & labour market conditions
5. Housing Starts & Completions 64-82
6. Housing Affordability & Interest Rates 83-101
7. Demographic Trends & Projections 102-105
Slide 3
Northern Ireland Housing Market
Summary
Slide 4
Summary of Pre & Post boom housing market conditions
75,000
110,000
145,000
180,000
215,000
250,000
285,000
Jan-05 Apr-06 Jul-07 Oct-08 Jan-10 Apr-11 Jul-12 Oct-13
£Jan 2005Unemployment 29,000 & fallingNet inward migration risingNew investors & lenders entering the marketCredit availability increasingNI house price 69% of UK average NI lowest house prices bar Scotland95% LTVs freely available & 75% LTV 5yr fix 5.2%Average UK SVR 6.6%Expectations prices would riseEconomic confidence high & risingAuctions not a major feature of property marketEquity withdrawal increasingly popularHousehold formation age-group (25-34) rising
Q3 / Q4 2013Unemployment 61,000 (Oct) & fallingNet outward migration continuingCredit conditions not what they wereFewer lendersNI house price 52% of UK averageNI lowest average house prices in UK 95% LTV's returningAverage UK 75% LTV 5yr fix is 3.37% (Oct-13)Average UK SVR 4.36% (Oct-13)Economic confidence low & job insecurity highExpectations prices have stabilised and may riseDistressed sales at auctionsNegative equity widespread, equity withdrawal more limitedInflationary pressures (food & energy) impacting upon affordabilityPrivate rental sector more popularHousehold formation age-group (25-34) peaking
Key issues going forwardBoE to raise Bank Rate eventually
Public expenditure cuts, tax rises & benefit cuts (e.g. housing benefit)Lack of employment opportunities for younger generation & tomorrow's FTBs
FTBs increasingly have student debt / tuition feesDebt repayment / repossessions when interest rate only mortgages expire
Outworking of NAMA & corporate / household de-leveragingUndersupply of housing and lack of funding for sectorScale of competition within banking - new products?
Planning changes?House-building per capita at a lower rate than in 1960 - longer term implications?
Slide 5
NI Housing Market Summary (1)
Residential property prices posted their 2nd successive quarterly rise of 2% q/q in Q3 2013 according to DFP’s Residential Property Price Index. Q3 2013 also represented the first quarter in almost 6 years (Q4 2007) that NI residential property prices have posted year-on-year increases. The median residential property prices are now 54% below their peak.
According to DFP’s NI Residential Property Price Index, transactions increased by 7% q/q in Q3 2013 and were 12% higher than the corresponding quarter in 2012. The RPPI uses data from the HMRC and includes mortgages and sales through auctions. There were 14,919 property transactions in NI in over the year to Q3 2013. This represents a 15% rise on the previous 4 quarter period and is 59% above the low in Q2 2009.
The total level of NI property transactions in the 4 quarters to Q3 2013 was 64% below the Q1 2007 peak (41,442). The value of NI’s residential property transactions has fallen by £5.7bn (80%) since the Q1 2007 peak. The steep fall in property transactions has seen activity within the Business Services & Finance sector fall (as of Q2 2013) by 51% since Q4 2006. The equivalent sector in the UK is just 0.3% below its pre-downturn peak.
According to the Council of Mortgage Lenders (CML), NI mortgage activity increased by 22% q/q and 22% y/y in Q3 2013. Over the last 4 quarters to Q3 2013, there were 9,500 mortgages in NI. This compares with 27,000 in 2006. As a result, mortgage activity in NI is running at 35% of 2006 levels and 73% below the peak in 2003 (35,100).
The incidence of negative equity has been growing in NI but falling in most other UK regions. According to the CML, 35% of mortgages taken out since 2005 in NI were in negative equity in October 2012. This was 3.5 times the corresponding rate for the UK (10%). Other studies estimate 20-25% of all NI mortgage holders are in negative equity. This is more than any other UK region and compares with 10.5% of UK mortgage holders in the mid-1990s.
According to the NHBC, the sale of new houses hit a series low in Q2 2013. New house sales over the year to Q2 2013 were 84% below 2006 levels.
Slide 6
NI Housing Market Summary (2)The NI FTB mortgage market is expected to hit a 6-yr high in mortgage completions for 2013. Nevertheless, FTB mortgage activity over the year to Q3 2013 remains 37% below 2006 levels. This is broadly in line with the UK (-40%). The FTB segment accounted for 59% of the mortgage market (UK=449%) over the year to Q3 2013 – its highest share since 2001.
Meanwhile there has been virtually no recovery in NI’s ‘home mover’ market. Mortgage completions within NI’s ‘home mover’ market over the year to Q3 2013 were 78% below 2006 levels. This represents the lowest number of mortgage completions since 1974. By comparison, the UK ‘home mover’ market is 54% below its 2006 levels.
NI’s remortgage market has plummeted over the last six years. During the year to Q3 2007, there were 32,900 remortgages in Northern Ireland. Over the year to Q3 2013, there were 28,200 fewer (or -86%) remortgages.
In 2011 there were just 6,977 house completions – the lowest outturn since 1994. The corresponding figure for 2012 was 7,920. A second consecutive annual increase is estimated for 2013 with around 8,700 units. This is 52% below the 2006 peak of 18,000 units. House completions in the UK and the RoI are 40% and 91% below their respective pre-crisis peaks.
NI is currently building fewer houses per capita than it was in 1960. At its peak (2006), NI was building 10.3 housing units per 1,000 population. 2013’s estimate is 4.7 per 1,000 population which is still three times the rate in the Republic of Ireland (1.6) and twice the rate in the UK (2.2).
Housing affordability has improved markedly for all house buyers. According to Nationwide, mortgage payments as a percentage of disposable incomes for first-time buyers is at a 15-year low. But disposable income after necessities (food & energy) is also important. Food, drink and energy inflation has increased by 42% between Q3 2007 and Q3 2013.
Improving mortgage affordability is not all one-way traffic due to tax and benefits changes alongside inflationary pressures. Not least, food and energy inflation.
The Bank of England’s ‘bank rate’ remains at its lowest level since 1694 and can only go up. The BoE is expected to keep rates on hold into 2015. Average interest rates on 5-yr fixed rate mortgages (75% LTV) recently hit a record low.
NI’s household formation category (25-34 years of age) has almost peaked and is expected to fall over the next decade.
Slide 7
House Prices &
Performance
Slide 8
Until May 2012 there were 5 house price surveys in NI…The Halifax House Price Index (Quarterly)The Halifax produces a UK wide House Price Index based on their own mortgage approvals. A regional index for Northern Ireland is also produced on a quarterly basis.www.lloydsbankinggroup.com/media1/economic_insight/halifax_house_price_index_page.asp
The Nationwide House Price Index (Quarterly)The Nationwide produces a UK wide House Price index based on their own mortgage approvals. A regional index is produced for Northern Ireland on a quarterly basis. Indices and average prices for the UK and regions are produced using a updated mix-adjusted House Price methodology. Like the Halifax and NI RPPI this allows ‘typical’ property to be priced over time on a like-for-like basis. www.nationwide.co.uk/hpi
Bank of Ireland / Northern Ireland Housing Executive / University of Ulster Quarterly House Price IndexThe Northern Ireland Quarterly House Price Index is produced by the BoI, NIHE & UU. The market evidence is sourced using a sample of estate agents across Northern Ireland. The price statistics are simple arithmetic averages. The index is weighted to reflect the market share of each property type (e.g. terraced, semi-detached, apartment etc)
www.bankofireland.co.uk/bank-of-ireland-group/financial-news/boi-house-price-index/
Office for National Statistics UK House Price Index (Monthly)The ONS House Price Index (HPI), previously published by the Department for Communities and Local Government (DCLG), is a monthly release that publishes figures for mix-adjusted average house price indices for the UK and its regions.The index is calculated using mortgage financed transactions that are collected via the Regulated Mortgage Survey by the Council of Mortgage Lenders. These cover the majority of mortgage lenders in the UK.
http://www.ons.gov.uk/ons/rel/hpi/house-price-index/october-2012/stb-october-2012.html
RICS Housing Market Survey, Northern Ireland (Monthly)The Royal Institution of Chartered Surveyors (RICS) & Ulster Bank Housing Market Survey. Uses a house price balance r diffusion index. The balance = the proportion of surveyors reporting a rise in price minus those reporting a fall.
Slide 9
RPPI Background
Until
May
2012,
there
were
5
surveys
that
provided
slightly
different
views
on
either
the
average
house
price
or
the
direction
of
house
prices. On
the
23rd
May
the
Department
of
Finance
&
Personnel
(DFP)
added a 6th survey.
The
latest
addition
has
a
number
of
distinct
advantages
over
the
existing
set
of
surveys
and
is
likely
to
become the one most closely followed.
The
new
Northern
Ireland
Residential
Property
Price
Index
(NI
RPPI),
unlike
the
sample‐based
surveys,
includes
all
the
property
transactions
notified
to
Her
Majesty’s
Revenues
&
Customs
(HMRC)
within
Northern
Ireland.
Therefore
it
includes
almost
the
complete
set
of
residential
property
transactions
from
cash sales (including auctions) to mortgages.
The
NI
RPPI
includes
the
simple
average
and
median
(i.e.
the
price
below/above
which
half
of
properties
are
sold).
However,
both
of
these
measures
do
not
take
account
the
different
type
and
characteristics
(e.g. size, location) of properties sold each quarter.
The NI RPPI addresses this issue using a preferred method that calculates a standardised price, which is a
hypothecated
value
based
on
a
weighted
combination
of
prices
(e.g.
0.5%
of
a
detached
house
in
North
Down,
4%
of
a
terraced
house
in
Belfast
etc). This
method
provides
the
best
measure
of
an
index
reflecting pure price changes.
But an important 6th survey has been added: NI’s Residential Property Price Index (RPPI)
Slide 10
Latest Surveys: Summary House Price Performance
NI UK NI UK NI UK
Nationwide 1.1% 2.2% 1.0% 4.3% ‐52.5% ‐7.9%
Halifax ‐0.2% 2.0% ‐24.8% 6.2% ‐60.4% ‐14.7%
DCLG ‐0.6% 2.5% 0.4% 3.6% ‐49.4% 0.9%
DFP Residential Property Price Index 2.0% N.A 1.0% N.A ‐54.0% N.A
University of Ulster / Bank of Ireland 1.3% N.A ‐4.8% N.A ‐49.1% N.A
NI & UK House Price Changes for All Property Types
House Price SurveyQuarterly Change
Q3 2013 Change relative to pre‐downturn peak
Year‐on‐Year Change Q3 2013
The Halifax figures showing a 24.8% y/y decline in Q3 2013 looks to be at odds with all the other surveys
Slide 11
Latest Surveys Average House Prices
Survey Survey Coverage Sample Size NI UK
DCLG (mixed‐adjusted average price) Mortgages Only Most Providers Low £130,000 £246,00018.0%Nationwide (mix‐adjusted average price) Nationwide Mortgages Only Very Low £108,671 £170,918
Halifax (mix‐adjusted average price) Halifax Mortgages Only Very Low £90,951 £170,386
University of Ulster / Bank of Ireland Mortgages & Cash Sales Low £129,777 ‐
DFP NI Residential Property Price Index (RPPI) Mortgages, Cash Sales & Auctions Very High
NI RPPI Mean (simple average) " £115,316 ‐
NI RPPI Median* " £100,500 ‐
NI RPPI Standardised Price** " £98,612 ‐
Average House Prices ‐ All Property Types Q3 2013
* Median (i.e. the price below / above which half properties are sold) removes the distortion on average from v.high / low prices** Standardised Price is preferred method for measuring house price changes as it takes account the different type and characteristics (e.g. size, location)
Slide 12
NI surveyors have reported house price growth for 6 consecutive months
Net balance of surveyors reporting a fall / rise in NI average house prices
-100
-75
-50
-25
0
25
50
75
100
Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13
% Balance
Price Rises
PriceFalls
Source: RICS
67 Months
Slide 13
Residential property prices have fallen 54% peak-to- trough. Latest survey suggests prices have bottomed out
NI Residential Property Price Index Index (2005=100)
80
100
120
140
160
180
200
2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013 Q3
Index Q1 2005 = 100
Source: DFP RPPI
Prices now 54% below
peak
Slide 14
RoI house prices have been rising & now 48% below peak. Unlike NI RPPI, RoI’s CSO data does not include cash sales
NI & RoI Residential Property PricesQuarterly
-48% below peak
-49% below peak
-54% below peak
50
75
100
125
150
175
200
2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013 Q3
Index Q1 2005 = 100
NI (RPPI) RoI NI ONS*
Source: DFP, CSO, ONS* includes mortgages only
Slide 15
In NI, terraced properties (-59%) have fallen the most from peak & Semi-Detached (-53%) the least
Northern Ireland Residential Property Prices
50
75
100
125
150
175
200
225
2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013 Q3
Index Q1 2005 = 100
Detached Semi-Detached Terraced Apartments
Source: DFP RPPI
Q3 2013 Relative to Peak Detached -54%Semi-Detached -53%Terraced -59%Apartments -57%
Slide 16
NI Residential Property Price Index by property type
All Property Prices Detached Semi‐Detached Terraced Apartments
2005 Q1 100 100 100 100 100
2005 Q2 104 106 105 101 100
2005 Q3 110 112 110 110 103
2005 Q4 113 115 113 114 104
2006 Q1 117 117 117 118 112
2006 Q2 128 124 129 133 120
2006 Q3 142 137 142 149 131
2006 Q4 159 151 160 168 154
2007 Q1 173 165 174 187 164
2007 Q2 190 190 194 195 180
2007 Q3 198 208 198 201 177
2007 Q4 189 199 188 192 176
2008 Q1 172 181 173 176 163
2008 Q2 160 168 165 161 157
2008 Q3 146 152 147 149 140
2008 Q4 132 139 134 135 121
2009 Q1 123 126 122 127 114
2009 Q2 125 130 125 126 120
2009 Q3 125 128 124 128 119
2009 Q4 125 131 126 127 120
2010 Q1 122 128 122 118 114
2010 Q2 123 127 125 117 114
2010 Q3 120 125 122 113 115
2010 Q4 114 120 116 106 106
2011 Q1 107 116 109 98 102
2011 Q2 105 110 109 97 98
2011 Q3 103 111 106 93 100
2011 Q4 100 109 103 90 94
2012 Q1 93 96 99 82 85
2012 Q2 92 97 95 84 81
2012 Q3 90 94 94 82 79
2012 Q4 88 91 92 80 79
2013 Q1 88 93 91 78 78
2013 Q2 90 95 92 79 78
2013 Q3 91 97 93 82 78
Q/Q Change 2% 1% 1% 3% 1%
Y/Y Change 1% 3% ‐1% 0% ‐1%
Fall from Peak ‐54% ‐54% ‐53% ‐59% ‐57%
Source: DFP NI RPPI November 2013, Note % changes are calculated using unrounded figures
Northern Ireland Residential Property Price IndexIndex 2005 Q1 = 100
Slide 17
Belfast Standardised
Price
Belfast RPPI
Outer Belfast Standardised
Price
Outer Belfast RPPI
East of N.Ireland
Standardised Price
East of N.Ireland RPPI
North of N. Ireland
Standardised Price
North of Northern Ireland
RPPI
West & South of N. Ireland
Standardised Price
West & South of N.Ireland RPPI
2005 Q1 £104,003 100 £114,980 100 £106,397 100 £104,955 100 £109,431 100
2005 Q2 £105,157 101 £119,811 104 £108,027 102 £110,841 106 £118,383 108
2005 Q3 £114,360 110 £125,622 109 £113,994 107 £118,782 113 £124,405 114
2005 Q4 £114,776 110 £128,264 112 £117,352 110 £123,087 117 £130,874 120
2006 Q1 £117,336 113 £130,833 114 £121,886 115 £130,134 124 £137,479 126
2006 Q2 £132,694 128 £143,740 125 £131,595 124 £139,108 133 £147,251 135
2006 Q3 £148,334 143 £160,533 140 £146,126 137 £153,639 146 £160,860 147
2006 Q4 £167,779 161 £181,559 158 £165,535 156 £166,938 159 £179,770 164
2007 Q1 £178,508 172 £199,326 173 £186,351 175 £179,541 171 £192,112 176
2007 Q2 £196,923 189 £219,529 191 £204,953 193 £196,055 187 £210,131 192
2007 Q3 £207,252 199 £230,610 201 £214,788 202 £205,713 196 £208,016 190
2007 Q4 £190,011 183 £227,866 198 £200,846 189 £199,752 190 £199,899 183
2008 Q1 £171,040 164 £203,268 177 £186,905 176 £179,400 171 £187,019 171
2008 Q2 £159,952 154 £190,570 166 £173,660 163 £171,354 163 £167,304 153
2008 Q3 £150,062 144 £166,243 145 £157,575 148 £154,838 148 £156,794 143
2008 Q4 £128,506 124 £149,341 130 £148,102 139 £142,290 136 £143,240 131
2009 Q1 £121,157 116 £137,320 119 £135,413 127 £128,963 123 £136,038 124
2009 Q2 £129,919 125 £141,616 123 £133,312 125 £125,542 120 £139,776 128
2009 Q3 £133,120 128 £142,832 124 £134,815 127 £124,314 118 £135,754 124
2009 Q4 £131,115 126 £141,738 123 £136,499 128 £129,493 123 £137,082 125
2010 Q1 £125,067 120 £140,301 122 £129,659 122 £127,771 122 £134,960 123
2010 Q2 £125,319 120 £143,749 125 £131,373 123 £127,532 122 £132,305 121
2010 Q3 £122,164 117 £142,040 124 £128,437 121 £119,227 114 £131,125 120
2010 Q4 £111,777 107 £131,057 114 £122,871 115 £122,132 116 £124,628 114
2011 Q1 £105,647 102 £126,151 110 £117,006 110 £113,685 108 £116,962 107
2011 Q2 £105,577 102 £122,440 106 £112,857 106 £108,049 103 £112,089 102
2011 Q3 £104,826 101 £121,580 106 £111,979 105 £104,789 100 £108,812 99
2011 Q4 £100,338 96 £119,201 104 £107,039 101 £102,873 98 £105,858 97
2012 Q1 £93,474 90 £111,526 97 £99,458 93 £95,624 91 £97,546 89
2012 Q2 £93,953 90 £111,205 97 £99,178 93 £94,284 90 £94,088 86
2012 Q3 £93,050 89 £110,416 96 £96,437 91 £89,995 86 £93,458 85
2012 Q4 £90,345 87 £107,410 93 £94,262 89 £89,381 85 £89,193 82
2013 Q1 £87,283 84 £107,584 94 £92,842 87 £89,715 85 £92,437 84
2013 Q2 £90,414 87 £108,284 94 £94,693 89 £94,156 90 £92,838 85
2013 Q3 £93,042 89 £109,869 96 £95,727 90 £94,241 90 £95,269 87
Q/Q Change 3% 1% 1% 0% 3%Y/Y Change 0% 0% ‐1% 5% 2%Fall from Peak ‐55% ‐52% ‐55% ‐54% ‐55%
Standardised Residential Property Price & Index by NI Region
Source: DFP NI RPPI November 2013
Slide 18
Residential Prices in Outer Belfast are the highest within Northern Ireland and now 52% below 2007 peak
Regional Area Index(Quarter 3 2013)
% Change on Previous Quarter
% Change over 12 months
Q3 2013 relative to Peak
Standardised Price
(Quarter 3 2013)
Belfast 89 3% 0% ‐55% £93,042
Outer Belfast 96 1% 0% ‐52% £109,869
East of N.Ireland 90 1% ‐1% ‐55% £95,727
North of N.Ireland 90 0% 5% ‐54% £94,241
West & South of N.Ireland 87 3% 2% ‐55% £95,269
Northern Ireland 91 2% 1% ‐54% £98,612
NI Residential Property Price Index & Standardised Price of Properties Sold in each NUTS3 Area
Source: DFP NI RPPI November 2013
Slide 19
Median, Mean & Standardised Residential Property Prices
Quarter Simple Mean
Simple Median
Standardised Price (RPPI)
2005 Q1 £116,293 £100,000 £108,232
2005 Q2 £120,578 £105,500 £112,279
2005 Q3 £128,901 £115,000 £119,173
2005 Q4 £129,618 £117,000 £122,487
2006 Q1 £133,152 £120,000 £126,844
2006 Q2 £145,478 £130,000 £138,208
2006 Q3 £164,159 £145,000 £153,370
2006 Q4 £179,299 £160,000 £172,285
2007 Q1 £198,072 £175,000 £187,603
2007 Q2 £216,870 £193,000 £205,986
2007 Q3 £234,135 £200,000 £214,477
2007 Q4 £231,717 £192,000 £204,284
2008 Q1 £212,124 £175,000 £186,469
2008 Q2 £188,519 £165,000 £173,561
2008 Q3 £175,782 £152,000 £157,767
2008 Q4 £161,613 £144,887 £143,080
2009 Q1 £146,401 £130,000 £132,654
2009 Q2 £148,977 £132,000 £134,772
2009 Q3 £149,475 £135,000 £135,018
2009 Q4 £151,715 £137,500 £135,699
2010 Q1 £148,220 £124,000 £132,013
2010 Q2 £142,696 £125,000 £132,996
2010 Q3 £141,080 £125,000 £129,887
2010 Q4 £135,204 £120,000 £123,160
2011 Q1 £127,315 £112,000 £116,194
2011 Q2 £124,853 £112,000 £113,130
2011 Q3 £126,082 £111,500 £111,301
2011 Q4 £121,489 £106,000 £108,037
2012 Q1 £115,648 £100,506 £100,483
2012 Q2 £112,113 £98,000 £99,674
2012 Q3 £115,995 £100,000 £97,708
2012 Q4 £112,194 £96,000 £95,295
2013 Q1 £110,234 £94,000 £94,951
2013 Q2 £111,248 £95,000 £97,029
2013 Q3 £115,316 £100,500 £98,612
Source: DFP NI RPPI November 2013
NI Average Sales Prices Q1 2005 ‐ Q3 2013
Quarter Detached Semi-Detached Terraced Apartment
2005 Q1 £161,290 £104,899 £80,119 £98,729
2005 Q2 £170,572 £110,189 £81,157 £98,411
2005 Q3 £181,064 £115,112 £88,230 £101,414
2005 Q4 £184,972 £118,977 £90,947 £103,025
2006 Q1 £189,255 £122,910 £94,749 £110,729
2006 Q2 £200,370 £134,898 £106,387 £118,297
2006 Q3 £221,391 £149,205 £119,211 £128,940
2006 Q4 £244,068 £167,883 £134,462 £152,147
2007 Q1 £265,663 £182,988 £150,051 £161,794
2007 Q2 £306,097 £203,650 £156,597 £177,331
2007 Q3 £335,812 £208,014 £160,908 £174,611
2007 Q4 £320,385 £197,022 £154,180 £173,420
2008 Q1 £292,330 £181,197 £141,195 £161,241
2008 Q2 £271,310 £173,138 £129,025 £155,436
2008 Q3 £245,225 £154,094 £119,365 £138,056
2008 Q4 £223,606 £140,210 £108,351 £119,909
2009 Q1 £203,759 £127,922 £102,031 £112,422
2009 Q2 £209,928 £130,855 £100,869 £118,291
2009 Q3 £206,486 £130,432 £102,870 £117,050
2009 Q4 £210,520 £131,654 £101,666 £118,508
2010 Q1 £205,648 £127,745 £94,899 £112,095
2010 Q2 £205,133 £131,028 £93,608 £112,726
2010 Q3 £200,839 £127,507 £90,546 £113,911
2010 Q4 £193,483 £122,200 £84,837 £104,701
2011 Q1 £186,836 £114,618 £78,572 £100,628
2011 Q2 £177,385 £114,021 £77,433 £96,916
2011 Q3 £179,511 £110,813 £74,545 £98,356
2011 Q4 £176,088 £108,450 £71,785 £92,345
2012 Q1 £155,393 £104,180 £65,609 £84,347
2012 Q2 £156,103 £99,860 £67,649 £80,081
2012 Q3 £151,604 £99,041 £65,840 £78,233
2012 Q4 £147,025 £96,204 £64,242 £78,197
2013 Q1 £149,583 £95,430 £62,429 £76,676
2013 Q2 £154,016 £96,803 £63,389 £76,718
2013 Q3 £155,960 £97,887 £65,588 £77,125
Source: DFP NI RPPI November 2013
Standardised NI Residential Property Price
Slide 20
Strabane, Derry & Limavady Council Areas have the lowest median house prices depending on property type
Local Government
DistrictDetached Semi-Detached Terrace Apartment Total
Antrim £160,000 £105,000 £59,250 N/A £105,000
Ards £170,500 £103,750 £65,000 £52,000 £102,000
Armagh £124,875 £71,250 £46,250 N/A £77,000
Ballymena £135,000 £100,000 £63,950 £89,950 £105,000
Ballymoney £117,500 £73,500 £53,000 N/A £83,000
Banbridge £139,500 £90,000 £61,000 £66,000 £93,000
Belfast £225,000 £116,000 £63,000 £80,000 £85,000
Carrickfergus £147,500 £105,000 £57,000 £67,000 £95,000
Castlereagh £185,000 £125,000 £76,000 £80,000 £127,975
Coleraine £133,750 £95,000 £69,000 £120,000 £115,000
Cookstown £130,000 £86,500 £62,000 N/A £93,000
Craigavon £132,000 £80,000 £49,000 £62,625 £75,500
Derry £147,250 £95,000 £57,500 £46,375 £83,000
Down £158,250 £95,000 £70,000 £80,564 £112,000
Dungannon £121,500 £88,500 £64,000 N/A £89,375
Fermanagh £124,750 £81,500 £58,000 £67,500 £90,000
Larne £134,950 £85,000 £55,000 £62,450 £82,500
Limavady £118,000 £69,500 £47,500 N/A £83,625
Lisburn £181,500 £112,000 £75,000 £70,000 £121,600
Magherafelt £132,000 £89,950 £64,000 N/A £103,500
Moyle £137,500 £90,000 £91,750 N/A £120,000
Newry & Mourne £144,200 £90,000 £59,000 £60,850 £95,000
Newtownabbey £154,375 £99,950 £58,750 £62,252 £99,950
North Down £185,000 £109,225 £85,500 £80,000 £120,000
Omagh £124,950 £80,000 £52,000 N/A £90,000
Strabane £108,000 £69,000 £50,750 N/A £78,000
Source: DFP NI RPPI November 2013
Median Sale Price of Residential Properties Sold between
October 2012 ‐September 2013 By Property Type & Location
Slide 21
UK & NI Regional House Price Performance
Slide 22
According to DCLG survey average house prices are 49% below peak & UK prices are almost twice those of NI
Average House Prices
£245k
£127k
75,000
100,000
125,000
150,000
175,000
200,000
225,000
250,000
Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13
£ UK NI
Source: ONS
49% fall back to mid-2005 levels**Excludes Auction Sales**
93%
Slide 23
Scotland was the only UK region not to post year-on- year growth in Q3 2013
Annual Average House Price Growth - Q3 2013Y/Y
0.4%
3.6%
-1.2%
-6% -4% -2% 0% 2% 4% 6% 8% 10% 12%
LonUKSEEMWMSW
EastYH
NWWal
NINE
Scot
Source: DCLG
Slide 24
NI experiences biggest peak-to-trough decline of all UK regions & has experienced the weakest recovery to date
House Price Recovery - % Rise Relative to TroughAs at Q3 2013
2.6%
16.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Lon SE UK East SW Wal EM WM Scot NW YH NE NI
Source: DCLG
Peak to Trough in UK Regional House Prices Q3 2013
-13.2%
-50.7%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Scot WM NW YH NE UK SE EM East SW Wal Lon NI
Source: DCLG **Mortgages Only Excludes Cash & Auction Sales**
Slide 25
The UK has recouped all of its house price falls but this is due to improvements within London & the South East
House Prices Relative to Pre-Downturn PeakQ3 2013
0.9%
19.4%
-49.4%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Lon SE UK East SW WM Wal EM Scot NW YH NE NI
Source: DCLG
**Mortgages Only Excludes Cash & Auction Sales**
Slide 26
NI’s housing boom & bust followed a different trajectory to both the US & RoI…..
Housing recoveries underwayAnnual House Price Inflation
-40
-25
-10
5
20
35
50
65
Oct-03 Oct-05 Oct-07 Oct-09 Oct-11 Oct-13
% Y/Y
US NI RoI
Source: DCLG & S&P / Case-Shiller 20-City House Price Index, ptsb/ESRI & CSO
Slide 27
…..and a very different trajectory from the UK
Annual Average House Price Growth 3 months / year
+5.2%
-0.6%
58.2%
-30%
-15%
0%
15%
30%
45%
60%
Sep-03 Sep-05 Sep-07 Sep-09 Sep-11 Sep-13
Y/Y
UK NI
Source: ONS
Slide 28
…but then again NI bucked the national trend during the UK’s housing boom & bust of the 1980s & 1990s…
UK's Boom & Bust of the 1980s & early 1990sHouse Price Index
20
25
30
35
40
45
50
55
60
65
70
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Index 2002 = 100
UK NI
Source: DCLG
Almost 8 years for UK house prices to return to
1989 levels
UK house price peak in Q3 1989
Slide 29
…the UK’s housing boom & bust of the 1980s & 1990s was mild relative to the NI variety of the noughties
The UK's Housing Boom,Bust & Recovery (1980s & 1990s) versus the N.Ireland Experience
Q3 1999
Q3 201350% below peak
23% above Q3 2002
0
50
100
150
200
250
300
350
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 1
0Yea
r 11
Year 1
2Yea
r 13
Year 1
4Yea
r 15
Index Yr 0 = 100
UK (1984 Q3 - 1999 Q3) NI (2002 Q3 - 2013 Q3)
Source: DCLG & UB Calculations
5 years prior to house price peaks(UK starts at Q3 1984 & NI Q3 2002)
UK average house prices 7% below peak & 106% above Q3 89
UK returns to house price peak in almost 7.5 years
NI peak Q2 07 143% rise in 5yrsUK peak Q3 89 121% rise in 5yrs
UK house prices 32.5% above peak in 10yrs & 193% rise in 15yrsQ3 1995
Slide 30
Longer-term NI’s relative house prices should track relative economic prosperity (UK excl. London & the South East)…
Relative Average House PricesNI v UK (Excluding London & South East)
60
80
100
120
140
Feb-02 Oct-03 Jun-05 Feb-07 Oct-08 Jun-10 Feb-12 Oct-13
Index
NI above U
Kex LS
E
Source: DCLG, ONS & UB NI's relative economic prosperity
GVA per capita relative to UK ex LSE
NI below
UK
ex LSE
NI = UK ex LSE NI below long-term
estimate of 'fair value'
Slide 31
…indeed NI has already returned to the bottom of the UK regional house price table….
Average FTB House Prices September 2013
184k
95k
50
100
150
200
250
300
350
Lon SE UK East SW WM EM Y&H NW Scot Wal NE NI
£K
Source: ONS**Mortgages Only Excludes Cash / Auction Sales**
Average House Prices September 2013
127k
192k
245k
100
150
200
250
300
350
400
450
Lon SE East UK SW UKexclLSE
WM Scot EM Y&H NW Wal NE NI
£K
Source: ONS**Mortgages Only Excludes Cash / Auction Sales**
Slide 32
…. a far cry from the halcyon days of 2007
Average House Prices August 2007Source: DCLG & permanent TSB/ESRI
249k
219k203k
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Lon Dub SE NI East SW UK RoI WM EM Wal Y&H NW Scot NE
£ Average FTB House Prices August 2007
189
167
75
125
175
225
275
Lon SE NI East SW UK WM EM Wal Scot NW NE Y&H
£k
Source: DCLG
Slide 33
Mortgage Activity / Housing
Transactions
Slide 34
HMRC residential property transactions (Quarterly & Rolling Annual Sum)
All Transactions Detached Semi‐Detached Terraced Apartments
2005 Q1 3,010 829 917 1,062 202
2005 Q2 8,055 2,240 2,502 2,828 485
2005 Q3 8,500 2,314 2,675 2,970 541
2005 Q4 9,667 2,515 3,018 3,511 623
2006 Q1 8,694 2,221 2,676 3,208 589
2006 Q2 10,889 2,851 3,259 3,907 872
2006 Q3 10,901 2,996 3,146 3,910 849
2006 Q4 10,903 2,787 3,149 4,098 869
2007 Q1 8,749 2,212 2,482 3,363 692
2007 Q2 9,378 2,338 2,706 3,599 735
2007 Q3 6,829 1,935 1,893 2,476 525
2007 Q4 4,330 1,162 1,226 1,516 426
2008 Q1 3,039 788 884 1,128 239
2008 Q2 3,347 824 1,036 1,166 321
2008 Q3 2,272 609 691 796 176
2008 Q4 2,255 620 722 746 167
2009 Q1 2,015 536 674 628 177
2009 Q2 2,846 737 1,027 851 231
2009 Q3 3,262 871 1,126 1,036 229
2009 Q4 3,600 999 1,243 1,106 252
2010 Q1 2,538 650 807 859 222
2010 Q2 2,712 744 928 852 188
2010 Q3 2,719 712 909 964 134
2010 Q4 2,819 828 845 938 208
2011 Q1 2,418 664 774 820 160
2011 Q2 2,627 766 812 818 231
2011 Q3 3,216 964 1,029 952 2712011 Q4 3,085 900 989 933 2632012 Q1 3,196 947 975 1,024 2502012 Q2 3,136 902 979 992 2632012 Q3 3,574 1,122 1,141 1,035 2762012 Q4 3,778 1,177 1,157 1,178 2662013 Q1 3,396 1,015 1,059 1,051 2712013 Q2 3,744 1,149 1,160 1,201 2342013 Q3 4,001 1,272 1,206 1,241 282
Q/Q Change 7% 11% 4% 3% 21%Y/Y Change 12% 13% 6% 20% 2%
Last 4 Quarters 14,919 4,613 4,582 4,671 1,053
Northern Ireland Residential Property Transactions
Source: DFP NI RPPI November 2013
All Transactions Detached Semi‐Detached Terraced Apartments
2005 Q4 29,232 7,898 9,112 10,371 1,851
2006 Q1 34,916 9,290 10,871 12,517 2,238
2006 Q2 37,750 9,901 11,628 13,596 2,625
2006 Q3 40,151 10,583 12,099 14,536 2,933
2006 Q4 41,387 10,855 12,230 15,123 3,179
2007 Q1 41,442 10,846 12,036 15,278 3,282
2007 Q2 39,931 10,333 11,483 14,970 3,145
2007 Q3 35,859 9,272 10,230 13,536 2,821
2007 Q4 29,286 7,647 8,307 10,954 2,378
2008 Q1 23,576 6,223 6,709 8,719 1,925
2008 Q2 17,545 4,709 5,039 6,286 1,511
2008 Q3 12,988 3,383 3,837 4,606 1,162
2008 Q4 10,913 2,841 3,333 3,836 903
2009 Q1 9,889 2,589 3,123 3,336 841
2009 Q2 9,388 2,502 3,114 3,021 751
2009 Q3 10,378 2,764 3,549 3,261 804
2009 Q4 11,723 3,143 4,070 3,621 889
2010 Q1 12,246 3,257 4,203 3,852 934
2010 Q2 12,112 3,264 4,104 3,853 891
2010 Q3 11,569 3,105 3,887 3,781 796
2010 Q4 10,788 2,934 3,489 3,613 752
2011 Q1 10,668 2,948 3,456 3,574 690
2011 Q2 10,583 2,970 3,340 3,540 733
2011 Q3 11,080 3,222 3,460 3,528 870
2011 Q4 11,346 3,294 3,604 3,523 925
2012 Q1 12,124 3,577 3,805 3,727 1,015
2012 Q2 12,633 3,713 3,972 3,901 1,0472012 Q3 12,991 3,871 4,084 3,984 1,0522012 Q4 13,684 4,148 4,252 4,229 1,0552013 Q1 13,884 4,216 4,336 4,256 1,0762013 Q2 14,492 4,463 4,517 4,465 1,0472013 Q3 14,919 4,613 4,582 4,671 1,053
Q/Q Change 3% 3% 1% 5% 1%Y/Y Change 15% 19% 12% 17% 0%2013 Q3 v Peak ‐64% ‐58% ‐63% ‐69% ‐68%Rise from Low 59% 84% 47% 55% 53%Source: DFP NI RPPI November 2013
Northern Ireland Residential Property Transactions 4 Quarter Rolling Sum
Slide 35
Property transactions in Q3 2013 hits highest level since Q4 2007, due to pick-up in cash sales & mortgages
Northern Ireland Mortgages (CML) & Residential Property Transactions* (RPT): Quarterly
0
2000
4000
6000
8000
10000
12000
14000
2005 Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3CML Mortgages DFP / HMRC Residential Property Transactions
Source: CML & DFP / HMRC Residential Property Transactions, * Includes cash sales
The larger the difference between the two was largely an indication of non-CML mortgages & cash sales.
Now it is almost entirely due to cash sales
Slide 36
NI mortgage activity increases by 22% q/q in Q3
NI Mortgages (CML) & Residential Property Transactions (RPT): Quarterly Growth
21.7%
6.9%
-60%
-45%
-30%
-15%
0%
15%
30%
45%
60%
2005 Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
Q/Q
CML DFP/HMRC RPT
Source: CML & DFP / HMRC Residential Property Transactions (RPT include cash sales)
Slide 37
Mortgage activity up 22% y/y in Q3 & overall transactions up 12% y/y (difference due to rise in auction / cash sales)
NI Mortgages (CML) & Residential Property Transactions (RPT): Y/Y Growth
21.7%
11.9%
-90%-75%-60%-45%-30%-15%
0%15%30%45%60%75%
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
Y/Y
CML DFP/HMRC RPT
Source: CML & DFP / HMRC Residential Property Transactions (RPT Include cash sales)
Slide 38
9,500 NI mortgages for house purchase over the year to Q3 2013. Up 6% y/y & 23% above 2008 low…
NI Mortgage ActivityAll Loans for House Purchase
9.5
-
5
10
15
20
25
30
35
40
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
*
000s
Source: CML, *4 Quarters to Q3 2013 Q3
No data available
NI Mortgage ActivityAll Loans for House Purchase Annual % Growth
-57.2%
5.6%
-60%
-40%
-20%
0%
20%
40%
60%
1978 1983 1988 1993 1998 2003 2008 2013*
Y/Y% Growth
Source: CML, *4 Quarters to Q3 2013 Q3
Slide 39
…first-time buyer market posts a larger rise with 5,600 loans in the 4 quarters to Q3 2013. 93% above 2008 low…
NI Mortgage ActivityLoans for First-Time Buyers Annual % Growth
-49.1%
9.8%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013*
Y/Y% Growth
Source: CML, *4 Quarters to Q3 2013 Q3
NI Mortgage ActivityLoans for First-Time Buyers Only
5.6
-
5
10
15
20
25
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
*
000s
Source: CML, *4 Quarters to Q3 2013 Q3
No data available
Slide 40
…while second hand market (‘Home Movers’) still experiencing weakest activity since 1974…
NI Mortgage ActivityLoans for Home Movers
3.8
-
5
10
15
20
25
1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013*
000s
Source: CML, *4 Quarters to Q3 2013 Q3
No data available
NI Mortgage ActivityLoans for Home-Movers Annual % Growth
-60.5%
-2.6%
-70%
-50%
-30%
-10%
10%
30%
50%
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013*
Y/Y% Growth
Source: CML, *4 Quarters to Q3 2013 Q3
Slide 41
…NI’s recovery within the mortgage market continues to lag the UK
Mortgage Activity Loans for Home-Movers % Y/Y Growth
-75%
-60%
-45%
-30%
-15%
0%
15%
30%
45%
2001 2003 2005 2007 2009 2011 2013*
Y/Y
NI UK
Source: CML, *4 Quarters to Q3 2013 Q3
Mortgage Activity Loans for First-Time Buyers % Y/Y Growth
-60%
-45%
-30%
-15%
0%
15%
30%
45%
60%
75%
2001 2003 2005 2007 2009 2011 2013*
Y/Y
NI UK
Source: CML, *4 Quarters to Q3 2013 Q3
Slide 42
Residential property transactions up 15% y/y in Q3 2013 but volumes over the year to Q3 are 64% below 2006 levels
NI Residential Property TransactionsRolling 4 Quarter Sum
14,919
41,442
9,388
-
10,000
20,000
30,000
40,000
50,000
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
64% below peak but 59%
above low
Source: DFP
**Includes Auction Sales**
All NI Residential Property TransactionsQuarterly
-
2,000
4,000
6,000
8,000
10,000
12,000
2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013 Q3
Source: DFP RPPIIncludes Auction Sales
Slide 43
The value of NI’s property transactions has fallen by £5.7bn (80%) relative to peak
Value of NI's Residential Property Transactions (Transactions x Standardised Price)
£7.1bn
£1.44bn
0.0
0.5
1.0
1.5
2.0
2.5
2006 Q3 2008 Q2 2010 Q1 2011 Q4 2013 Q3
Quarterly £Bn
0
1
2
3
4
5
6
7
8Annual £BnQuarterly Left Axis Annual Right Axis
Source: DFP NI RPPI
80% fall
Slide 44
…with the FTB market accounting for almost 60% of all NI mortgage activity – its highest share since 2001
First-Time Buyer Share of the Market
58.9%
43.5%
20%
30%
40%
50%
60%
70%
80%
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013*
NI UK
Source: CML, *4 Quarters to Q3 2013 Q3
Slide 45
The number of NI remortgages has plummeted as well
NI Remortgages - Number of Loans
32.9K
4.7K
0
1
2
3
4
5
6
7
8
9
10
2005Q2
2006Q1
2006Q4
2007Q3
2008Q2
2009Q1
2009Q4
2010Q3
2011Q2
2012Q1
2012Q4
2013Q3
Quarterly K
0
5
10
15
20
25
30
35Annual K
Quarterly (Left Hand Side) Rolling Annual Total (Right Hand Side)
Source: CML
86% decline
Slide 46
…with the UK remortgage market not faring much better
Remortgage Activity % Y/Y Growth
-75%
-60%
-45%
-30%
-15%
0%
15%
30%
2007 2008 2009 2010 2011 2012 2013*
Y/Y
NI UK
Source: CML, *4 Quarters to Q3 2013 Q3
Remortgage Activity Levels Levels2006 = 100 Rolling 4 Quarter Total
-84% below 2006 levels
-73% below 2006 levels
0
20
40
60
80
100
120
140
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
NI UK
Slide 47
New house sales in NI still following a downward trajectory with sales 84% below 2006 levels…
NI New House SalesRolling Annual Sum
0
2000
4000
6000
8000
2005 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2
Source: DSD / NHBC
84% below peak
Pre-crisis average
Slide 48
…property legacy explains why NI’s Business Services & Finance output is some 51% below its Q4 2006 peak…
NI Business Services & Finance Output Levels
0.3% below pre-downturn peak
55
70
85
100
115
130
145
160
2004 Q2 2005 Q4 2007 Q2 2008 Q4 2010 Q2 2011 Q4 2013 Q2
Index 2010 = 100
NI UK
51% below peak
Source: DFP Index of Services & ONS
Slide 49
…the rise of remortgaging was accompanied by a rise in housing equity withdrawal for spending on 2nd homes….
UK Housing Equity Withdrawal
-20
-15
-10
-5
0
5
10
15
20
Jun-99 Jun-01 Jun-03 Jun-05 Jun-07 Jun-09 Jun-11 Jun-13
£Bn
-8
-6
-4
-2
0
2
4
6
8
10
%
HEW in £m HEW as a % of post-tax income
Source: BoE
Slide 50
…or a new car. Decreases in remortgaging / equity withdrawal is one factor behind decline in new car sales
17,143 fewer NI new car sales relative to 2007 peak 12 Month Rolling Sum
57,170
47,580
51,565
68,708
30,000
40,000
50,000
60,000
70,000
80,000
Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13
Sales now 26% below
peak
Source: SMMT
Temporary reduction in VAT rate to 15% & 'Cash for
Clunkers'
New Car RegistrationsIndexed 2007 =100
-25%
+1%
-7%
-60%
0
20
40
60
80
100
120
Dec-07 Feb-09 Apr-10 Jun-11 Aug-12 Oct-13
Index
NI Scotland Wales UK RoI Pre-Recession Peak
Source: SMMT & SIMI
Slide 51
Levels of mortgage activity in both the UK & NI remain well below 2006 (pre-crisis) levels…
NI & UK Mortgage Activity Levels:First-Time Buyers2006 =100 Rolling 4 Quarter Total
0
20
40
60
80
100
120
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
NI UK
Source: CML
37% below 2006 levels
40% below 2006 levels
NI & UK Mortgage Activity Levels: All Loans2006 =100 Rolling 4 Quarter Total
0
20
40
60
80
100
120
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
NI UK
Source: CML
48% below 2006 levels
65% below 2006 levels
Slide 52
… the ‘Home Movers’ segment remains virtually stagnant. FTBs more likely to go for new builds rather than 2nd hand dwellings
Mortgage Activity (Home Movers) 2013 Q3* Relative to Pre-Credit Crunch Levels (2006)
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
Peak to TroughDecline
Recovery FromTrough
Net Position
NI UK
Source: CML, * 4 Quarters to 2013 Q3
NI & UK Mortgage Activity Levels: Home-Movers2006 = 100 Rolling 4 Quarter Total
0
20
40
60
80
100
120
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
NI UK
Source: CML 78% below 2006 levels
54% below 2006 levels
Slide 53
NI posted steeper decline & stronger recovery than UK in FTB market but their net position is similar
First-Time Buyer Mortgage Activity 2013 Q3* Relative to Pre-Credit Crunch Levels (2006)
-100%
-75%
-50%
-25%
0%
25%
50%
75%
100%
Peak to TroughDecline
Recovery FromTrough
Net Position
NI UK
Source: CML, * 4 Quarters to 2012 Q3
Mortgage Activity (All Loans) 2013 Q3* Relative to Pre-Credit Crunch Levels (2006)
-80%
-60%
-40%
-20%
0%
20%
40%
60%
Peak to TroughDecline
Recovery FromTrough
Net Position
NI UK
Source: CML, * 4 Quarters to 2013 Q3
Slide 54
Within Northern Ireland the Home Mover & Remortgage markets have fallen the most
N.Ireland Mortgage & Remortgage Activity Levels2006 = 100 Rolling 4 Quarter Total
-65%
-40%
-68%
-86% from peak
0
20
40
60
80
100
120
140
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
All Mortgages First-Time Buyers Home Movers Remortgages
Source: CML
Slide 55
Residential property transactions (mortgages & cash sales) down 64% relative to 2006 levels
NI Residential Property Transactions* Levels2006 = 100 Rolling 4 Quarter Total
-65%
-84% below 2006 & 86% below peak
-64%
0
20
40
60
80
100
120
140
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
All Mortgages Remortgages Property Transactions RPPI
Source: CML & DFP/HMRC Residential Property Transactions (RPT), * Includes cash sales
Slide 56
Comparison between CML & HMRC property transactions suggests 30% of transactions are cash sales
Northern Ireland Mortgages & Property Transactions* Rolling 4 Quarter Total
0
10
20
30
40
50
2005 Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
000s
Mortgages CML DFP / HMRC Residential Property Transactions (RPT)
Source: CML & DFP / HMRC Residential Property Transactions* (RPT includes mortgages & cash sales)
Difference between two is an indication of cash
sales & mortgage providers not in CML
Difference between two is now a good indication of cash
sales
Slide 57
Over 1/3rd of mortgages advanced since 2005 in Northern Ireland were in negative equity in 2012
Residential Housing Negative Equity % of mortgages advanced since 2005 in negative equity
35%
10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
SE SW Lon East WM EM UK Scot NE Wal NW Y&H NI
%
Source: CML, October 2012
Change in Residential Housing Negative Equity % Point Change between Oct 2012 & Aug 2011 CML studies
+7pp
-4pp
-12
-10
-8
-6
-4
-2
0
2
4
6
8
NE Y&H EM Lon WM UK NW SE SW East Scot Wal NI
% Point Change
Source: CML, based on % of mortgages advanced since 2005 in negative equity
Slide 58
According to some estimates between 20-25% of all mortgage holders are in negative equity in N.Ireland
Source: FCA Risk Outlook 2013 Negative equity assessment made in January 2013
Negative equity affected 10.5% of UK mortgage holders in the mid-1990s and was geographically concentrated in the southern regions of the UK. Today, negative equity is more prevalent in the northern UK regions. NI is the negative equity black spot in the UK.
Slide 59
Writs & summonses in respect of mortgages & mortgage possession orders remain at elevated levels
NI Mortgage Arrears(Writs & Originating Sumonses in respect of mortgages)
3,7383,905
0
1000
2000
3000
4000
5000
1981 1985 1989 1993 1997 2001 2005 2009 2013*
Source: NI Courts Service, * 4Quarters to Q3 2013
UK Recession
BoE Base Rate at Record Low
NI Mortgage Possession OrdersRolling Annual Average
2,1362,216
0
500
1000
1500
2000
2500
2004Q3 2006Q1 2007Q3 2009Q1 2010Q3 2012Q1 2013Q3
Source: NI Courts Service
**Not all writs & originating summonses (Actions for Mortgage Possession) or possession orders lead to eviction or re/possession**
Slide 60
Consumer stress will remain a major issue with the two legacies of unemployment and debt still to unwind…
NI Consumer StressRolling 4 Quarter Total
3,203
2,136
3,738
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2004Q3 2006Q1 2007Q3 2009Q1 2010Q3 2012Q1 2013Q3
Personal Insolvencies Mortgage Possession OrdersActions for Mortgage Possession
Source: DETI Insolvency Service & NI Courts Service
Credit Crunch begins Aug 07
**Not all writs & originating summonses (Actions for Mortgage Possession) lead to eviction or
re/possession**
NI Unemployment Claimant Count Levels
61,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Oct-86 Oct-89 Oct-92 Oct-95 Oct-98 Oct-01 Oct-04 Oct-07 Oct-10 Oct-13
Source: DFP
Oct 2013 64,900 at
mid-1997 levels
Record low Aug 0723,600
Good Friday Agreement signed
April 199857,900
Slide 61
…although employment growth (including full-time employment) has returned…
NI Employee Jobs Excludes Self-Employed
-1.0%
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
Q4 2006 Q4 2007 Q4 2008 Q2 2010 Q2 2011 Q2 2012 Q2 2013
Q/Q % Change
-4%
-3%
-2%
-1%
0%
1%
2%
3%Y/Y % Change
Q/Q Y/Y
Source: DFP
Discontinuity in Series
NI Annual Employment GrowthFull-Time & Part-Time Employee Jobs
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Jun-93 Dec-95 Jun-98 Dec-00 Jun-03 Dec-05 Jun-08 Dec-10 Jun-13
Y/Y
Full-Time Part-Time Total
Source: DFP, Figures are not seasonally adjusted
Part-time employment growing at a much faster rate than full-time employment
Full-time employment fell at a much faster rate than part-time
Recovery in Part-Time jobs
Slide 62
…unemployment has been falling but for the under 25s (the first-time buyers of tomorrow) it remains a big problem
ILO Unemployment Rates by Age-GroupJuly-September 2013
0%
5%
10%
15%
20%
25%
30%
18-24 25-49 50+ 16+Age Category
Source: DFP
NI unemployment falling Claimant Count Monthly Change
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
Apr-07 May-08 Jun-09 Jul-10 Aug-11 Sep-12 Oct-13
M/M
Nov 2008
+3,200
Source: DFP
-3,900
Slide 63
Student debt will affect FTB affordability. Over 109,000 borrowers with £1.2bn of outstanding student debt
Income Contingent Repayments for NI Domiciled Students Studying in Higher Education in UK & EU
0
20
40
60
80
100
120
1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12
Borrowers (000s)
0
0.2
0.4
0.6
0.8
1
1.2
1.4Debt (£bn)
No.of Borrowers with Outstanding Debt (000s) Amount of Outstanding Debt (£bn)
Source: The Student Loans Company 2013
Average debt for NI domiciled students leaving HE in 2012 was £15,690. *Not all of these students will remain in or return to Northern Ireland*
Slide 64
Housing Starts / Housing
Completions
Slide 65
Housing starts were still falling in 2012 but expected to bottom-out in 2013…
NI House StartsRolling Annual Sum
0
4000
8000
12000
16000
20000
2004Q3 2005Q4 2007Q1 2008Q2 2009Q3 2010Q4 2012Q1 2013Q2
NHBC Non-NHBC NHBC Total 2006 8,600 15,2602007 7,500 13,0002008 3,100 7,3802009 3,500 7,4802010 3,200 7,8302011 2,000 6,4902012 1,700 6,1802013 1,900* 5,940*** 4 quarters to Q3 2013**4 quarters to Q2 2013
Source: DSD & NHBC,NHBC now account for <30% of total NI private sector activity
Slide 66
…as the most recent data signals an upward trajectory
Annual Growth in NI Housing Starts
-100%
-50%
0%
50%
100%
150%
2004Q3 2006Q1 2007Q3 2009Q1 2010Q3 2012Q1 2013Q3
Y/Y
All Starts NHBC
Source: DSD & NHBC, * NHBC now account for <30% of total private sector NI activity
Slide 67
Over the last 6/7 years housing starts in Northern Ireland have fallen further than elsewhere in the UK …
Housing StartsRolling Annual Sum 2006=100
Q1 2013 46% below peak
Q2 201346% below
peak
Q1 2013 56% below
peak
Q2 201361% below peak
Q2 201340% below peak
0
25
50
75
100
125
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
Index 2006=100
UK Wales Scotland NI England
Source: DSD & DCLG
Slide 68
… but not as bad as the Republic of Ireland
Housing StartsRolling Annual Sum 2006=100
Q1 2013 46% below peak
Q2 2013 61% below peak
Q3 2013 94% below peak
0
25
50
75
100
125
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
Index 2006=100
UK NI RoI
Source: DSD, DCLG & DoE
Slide 69
NI & UK have experienced similar peak-to-trough declines
Housing Starts
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
UK England Scotland Wales NI RoI
Peak-to-Trough Fall Recovery from Trough Net Position
Source: DSD, DCLG & CSO, NI as of Q2 2013, Eng Q2 13, Wal Q2 13, Scot Q1 13, UK Q1 13 & RoI Q3 13
Slide 70
The RoI has experienced the steepest decline in housing starts with England posting the strongest recovery
Peak-To-Trough* Recovery-from-Trough Net Position**UK (as of Q1 2013) ‐56.8% 25.3% ‐45.8%
England (as of Q2 2013) ‐59.0% 46.5% ‐39.9%
Scotland (as of Q1 2013) ‐56.5% 1.4% ‐55.9%
Wales (as of Q2 2013) ‐58.8% 30.8% ‐46.2%
Northern Ireland (as of Q2 2013) ‐64.7% 10.2% ‐61.1%
Republic of Ireland (as of Q3 2013) ‐95.0% 11.5% ‐94.4%
Source: DSD & DCLG, *pre‐recession peak to trough over a 4 quarter period, ** latest position (last 4 quarters) relative to pre‐recession peak
Housing Starts
Slide 71
Annual rate of growth in house completions hits 52% in Q2 2013 with NHBC signalling a flat reading in Q3 2013…
Annual Growth in NI Housing Completions
-60%
-40%
-20%
0%
20%
40%
60%
80%
2004Q3 2006Q1 2007Q3 2009Q1 2010Q3 2012Q1 2013Q3
Y/Y
All NI Completions NHBC Completions
Source: DSD & NHBC,NHBC now accounted for just 30% of total NI private sector activity
Slide 72
…. 2013 should emerge as the 2nd successive year of growth following 5 years of contraction
NI House CompletionsRolling Annual Sum
0
4,000
8,000
12,000
16,000
20,000
2004Q3 2006Q1 2007Q3 2009Q1 2010Q3 2012Q1 2013Q3
NHBC Non-NHBC NHBC Total 2006 10,200 17,9652007 8,000 14,5102008 5,400 10,8002009 4,600 9,4302010 3,500 8,0402011 2,700 6,970 2012 2,200 7,9202013 2,100** 8,713* * Last 4 quarters to Q2 2013 ** Last 4 quarters to Q3 2013
Source: DSD & NHBC, * NHBC now accounts for only 25% of total private sector NI activity
Slide 73
NI has witnessed steeper declines than elsewhere
Housing CompletionsRolling Annual Sum 2006=100
46% below peak46%
below peak52%
below peak
Q2 201340% below peak
0
25
50
75
100
125
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
Index 2006=100
Wales Scotland NI England
Source: DSD & DCLG
Slide 74
… but not as bad as the Republic of Ireland
Housing CompletionsRolling Annual Sum 2006=100
Q1 2013 40% below peak
Q2 201352% below peak
Q2 201391% below peak
0
25
50
75
100
125
2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3
Index 2006=100
UK NI RoI
Source: DSD, DCLG & DoE
Slide 75
RoI house completions remain 91% below their pre-crisis peak which compares with 52% & 40% for NI & the UK
House Completions
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
UK England Scotland Wales NI RoI
Peak-to-Trough Fall Recovery from Trough Net Position
Source: DSD, DCLG & CSO, NI as of Q2 2013, Eng Q2 13, Wal Q2 13, Scot Q1 13, UK Q1 13 & RoI Q3 13
Slide 76
RoI & NI house-building sectors have experienced steepest declines to date. But NI has shown some recovery
Peak-To-Trough* Recovery-from-Trough Net Position**
UK (as of Q1 2013) ‐40.3% 0.0% ‐40.3%
England (as of Q2 2013) ‐39.6% 0.0% ‐39.6%
Scotland (as of Q1 2013) ‐46.5% 0.0% ‐46.5%
Wales (as of Q2 2013) ‐45.6% 0.0% ‐45.6%
Northern Ireland (as of Q2 2013) ‐66.1% 31.5% ‐51.5%
Republic of Ireland (as of Q3 2013) ‐91.3% 0.0% ‐91.3%
Source: DSD, DCLG & DoE, *pre‐recession peak to trough over a 4 quarter period, ** latest position (last 4 quarters) relative to pre‐recession peak
Housing Completions
Slide 77
House completions increased in 2012 & 2013 from 2011 low. Rise linked to completion of unfinished stock
NI Housing Completions
0
4,000
8,000
12,000
16,000
20,000
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013f
Total Completions Projected Need* 25 year Average
1998-201512,200
2008-202511,200
Source: DSD & UB Forecasts, * refers to official projections from published sources
Slide 78
…but spare a thought for the RoI. Northern Ireland does not have the same overhang of stock as the RoI…
Republic of Ireland Housing Completions
9k7.5k
0
20,000
40,000
60,000
80,000
100,000
1971 1977 1983 1989 1995 2001 2007 2013(f)
Source: DoE & UB Forecasts 91% fall
Slide 79
…but NI is still building fewer houses per capita than it was back in 1960…longer-term implications??
NI Housing Completions per 1,000 Population
20134.72011
3.8
200610.3
0
2
4
6
8
10
12
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
Source: DSD, NISRA & UB Calculations
Slide 80
The Republic of Ireland is building even fewer houses per capita as it has an overhang of excess supply
RoI House Completions per 1,000 pop
20.9
1.6
0
5
10
15
20
25
1971 1977 1983 1989 1995 2001 2007 2013(f)
Source: DoE / UB
Slide 81
Despite the slump in house building, NI is building at three times the rate of the RoI & twice the rate of the UK
House Completions per 1,000 Population
3.7 2.2
10.3
4.7
20.9
1.6
0
5
10
15
20
25
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
UK NI RoI
Source: DSD, ONS, DoE, CSO & UB Calculations
RoI was building at twice the rate of NI which was building at close three times the
rate of the UK
Slide 82
Housing Affordability / Interest Rates
Slide 83
Median Gross Annual Earnings 2013 All Employees Full-Time
27,017
23,904
20,000
22,500
25,000
27,500
30,000
32,500
35,000
Lon SE East UK Scot SW EM WM NW Y&H Wal NE NI
£
Source: DFP & ONS ASHE
Regional house prices are a function of supply & demand dynamics. But fundamentals such as wages are key
Median Gross Weekly Earnings 2013 All Employees Full-Time
517.5
460
400
450
500
550
600
650
700
Lon SE UK Scot East WM NW SW Y&H EM Wal NE NI
£ per wk
Source: DFP ASHE
Slide 84
In NI, the rate of inflation has outpaced earnings growth for most individuals
% Change in N.Ireland Median Wages v UK InflationCumulative Increase 2007-2013*
0%
5%
10%
15%
20%
25%
30%
Total Public Private Total Public Private CPI RPI
All Employees Full-Time Employees Only Inflation
Source: DFP ASHE & ONS, * April each year
Slide 85
After inflation the median private sector wage has fallen by almost 20% in real terms (after CPI inflation)
% Change in N.Ireland Median Wages in Real Terms Cumulative Increase 2007-2013*
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
Total Public Private Total Public Private
All Employees (Full-Time & Part-Time) Full-Time Employees Only
Source: DFP ASHE & ONS, * April each year
Slide 86
Those aged under 30 years of age have median earnings below the NI average…
NI Annual Median Gross Pay By Age-GroupFull-Time Employees 2013
17.5
0
5
10
15
20
25
30
Age 18-21 Age 22-29 Age 30-39 Age 40-49 Age 50-59 Age 60+
£000
Source: DFP ASHE, April 2013 NI Average for all age-groups
Slide 87
… & those under 40 (including the household formation 25-34 yrs category) have experienced the biggest falls in real earnings
NI Gross Median Wages for Full-Time Employees Cumulative Change in Real Terms 2007-2013*
-6.3%
-25%
-20%
-15%
-10%
-5%
0%
Age 18-21 Age 22-29 Age 30-39 Age 40-49 Age 50-59 Age 60+
Source: DFP ASHE & ONS, *using CPI inflation in April each year
NI average change for employees from all age-groups
Slide 88
The average incomes of borrowers was £42k in Q3 2013
Average incomes of N.Ireland Mortgage Borrowers
38k
42k
32k
51k
0
10
20
30
40
50
60
1992 Q3 1995 Q3 1998 Q3 2001 Q3 2004 Q3 2007 Q3 2010 Q3 2013 Q3
£k
New Dwellings All Dwellings First-Time Buyers Former Owner-Occupiers
Source: ONS, Regulated Mortgage Survey
Slide 89
According to the CML mortgage interest payments as a % of income are at their lowest levels since Q3 1996
Northern Ireland Mortgage AffordabilityMedian for All Borrowers
8.4
18.9
8.9
24.9
16.6
0
5
10
15
20
25
30
1979Q3 1983Q4 1988Q1 1992Q2 1996Q3 2000Q4 2005Q1 2009Q2 2013Q3
% of income
Interest Payments Capital & Interest Payments
Source: CML
Northern Ireland Mortgage AffordabilityMedian for First-Time Buyer Borrowers
8.1
21.9
10.2
26.2
17.1
0
5
10
15
20
25
30
1979Q3 1983Q4 1988Q1 1992Q2 1996Q3 2000Q4 2005Q1 2009Q2 2013Q3
% of income
Interest Payments Capital & Interest Payments
Source: CML
Slide 90
NI’s HPE ratio has dipped below the pre-boom long- term average (1997-2005) & is back to late 1990s levels…
Halifax House Price to Earnings RatioAll Houses & All Buyers
3.0
3.5
8.6
4.3
0
1
2
3
4
5
6
7
8
9
10
1997 Q4 2000 Q1 2002 Q2 2004 Q3 2006 Q4 2009 Q1 2011 Q2 2013 Q3
NI UK NI Pre-Boom LTA (1997-2005)
Source: Halifax, based on gross average annual salary of a male full-time employee
Slide 91
…and NI mortgage payments as a % of disposable income is lower than at anytime in over 30 years
Mortgage Payments as a % Average Disposable IncomeAll Houses & All Buyers
18.116.8
64.1
27.9
47.7
65.5
0
10
20
30
40
50
60
70
1984 Q3 1990 Q2 1996 Q1 2001 Q4 2007 Q3 2013Q2
%
NI UK NI Pre-Boom Average 1997-2005
Source: Halifax
Slide 92
NI’s HPE ratio for first-time buyers is in line with the pre-boom 10-yr average of 3.2…
Nationwide FTB House Price to Earnings Ratio
8.1
3.3
5.4
4.6
0
1
2
3
4
5
6
7
8
9
1984 Q4 1990 Q3 1996 Q2 2002 Q1 2007 Q4 2013 Q3
N Ireland UK NI Pre-Boom LTA NI 10-Yr Pre-boom Average
Source: Nationwide
Slide 93
NI FTB affordability index is at Q1 1998 levels
FTB Mortgage Payments as a % of Mean Take Home Pay
15.1%
74.8%
55.8%
32.6%
23.7%
51.8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1983 Q2 1989 Q2 1995 Q2 2001 Q2 2007 Q2 2013 Q2
NI UK NI Pre-Boom LTA
Source: Nationwide
Slide 94
…but its not just after tax income that is important. Income after necessities (food & energy) is important
Mortgage Affordability & CPI (FBTE) Inflation
50
75
100
125
150
175
200
225
2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013 Q3
Index 2005 = 100
Halifax Affordability Index Nationwide FTB Affordability IndexFood, Drink, Tobacco & Energy CPI No Change
Source: ONS, Halifax & Nationwide (FTB) affordability indices allrebased 2005=100
42% rise relative to
house price peak
+57%
-62% below Q2 2007 peak
-68% below peak
Slide 95
Between Q2 2007 & December 2013 the price of a tank of petrol / diesel has risen from £57/58 to £78/83 (35-43% rise)
UK Fuel Prices - Tank* of Petrol / Diesel (*60 Litres)
£51.3
£78.5
£88.8
£83.1
30
40
50
60
70
80
90
100
Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
£
Petrol Diesel
Source: ONS
'Credit Crunch' begins
Emergency Budget June 2010
NI House Price Peak
Slide 96
Inflation has contributed to income squeeze which in turn has deferred the deleveraging of household debt…
UK Average Weekly Earnings & CPI Inflation
0.8%
2.2%
0
1
2
3
4
5
6
Oct-01 Oct-03 Oct-05 Oct-07 Oct-09 Oct-11 Oct-13
%
Ave Weekly Earnings 3m Y/Y % (Excl. Bonuses) CPI Y/Y
Source: ONS
Income squeeze
Does not include taxes or changes to benefits
NICE Decade
Slide 97
Since Aug-07 CPI has risen by 21% which compares with a rise in average earnings of 11%
Cumulative % Change in UK Consumer Prices since 'Credit Crunch' began (Aug 07 to Oct 13)
11.0%
21.2%
0%
10%
20%
30%
40%
50%
60%
70%
Food & Non-Alcoholic
Beverages
Food ElectricityGas & Other
Fuels
TransportFuels &
Lubricants
TransportServices
Hotels &Restaurants
Total CPI AverageEarnings*
Source: ONS, *Average Earnings as of September 2013
Slide 98Slide 98
3The Bank Rate 1700‐2013
The Bank of England will not keep its bank rate at a record low forever…
Slide 99
…record low in 5-yr swap rates has been & gone…
UK Base Rate v 3 month Libor v 5Yr Swap (weekly)
1.87%
0
1
2
3
4
5
6
7
8
Dec-99 Dec-01 Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13
%
Base Rate 3mth Libor 5Yr Swap
Rise in swap rates preceeds base rate hikes
Source: Bloomberg
Slide 100
… the record low in 10-yr swap rates has also been and gone
UK Base Rate v 3 month Libor v 10Yr Swap (weekly)
2.8%
0
1
2
3
4
5
6
7
8
Dec-01 Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13
%
Base Rate 3mth Libor 10 Yr Swap
Rise in swap rates preceeds base rate hikes
Source: Bloomberg
Slide 101
Average interest rate on 5-yr fixed rate mortgages (75% LTV) has recently hit a record low. 2-yr fixes also falling
UK Average Mortgage Rates
3.15
3.37
4.36
4.42
0
1
2
3
4
5
6
7
8
9
Jan-01 Jun-02 Nov-03 Apr-05 Sep-06 Feb-08 Jul-09 Dec-10 May-12 Oct-13
%
Bank Rate Tracker Mortgage 5-yr Fixed LTV 75%SVR 2-Yr Fixed 90% LTV
Source: BoE
Slide 102
Demographic Trends & Projections
Slide 103
NI’s household formation group has almost peaked but is set to fall during the next decade
NI Household Formation Group 25-34 yrs of Age
150
175
200
225
250
275
300
1971 1977 1983 1989 1995 2001 2007 2013 2019 2025 2031 2037
000s
10
11
12
13
14
15
16%
Aged 25-34 years of age (Left Hand Scale) % of population (Right Hand Scale)
Source: NISRA
Slide 104
No. of individuals in 30s & 40s set to fall & will be outnumbered by those in 50s & 60s by 2030. Will impact on future demand for upsizing / downsizing
Northern Ireland Population Projections
350
375
400
425
450
475
500
525
550
2012 2016 2020 2024 2028 2032 2036
000s
Population aged in their 30s & 40s Population aged in their 50s & 60s
Source: NISRA
Slide 105
The no. of people aged >65 yrs is set to increase by 200k (+68%) over the next 24 years. How will housing supply adapt to changing demand?
Northern Ireland's Population & Projections
0
100
200
300
400
500
600
1971 1977 1983 1989 1995 2001 2007 2013 2019 2025 2031 2037
000s
Aged <16 years of age Aged 65+ years of age
Source: NISRA
Slide 106Slide 106
Disclaimer
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The information including any opinions expressed and the pricing given, is indicative, and constitute our judgement at time of publication and are subject to change without notice. The information contained herein should not be construed as advice, and is not intended to be construed as such. This publication provides only a brief review of the complex issues discussed and readers should not rely on information contained here without seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to the information and disclaim all liability for use the recipient or their advisors make of the information. Over-the-counter (OTC) derivates can involve a number of significant and complex risks which are dependent on the terms of the particular transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incur substantial costs if you wish to close out your position.
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