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Belfast and the rewards of peace

April 11, 2018Article by Paul Avery

Twenty years ago, the Good Friday Agreement brought lasting peace to Northern Ireland after decades of sectarian conflict. The landmark accord has proven to be one of the greatest political achievements of the 20th century, and was commemorated yesterday with a Belfast conference featuring three of its living architects: Tony Blair, Bertie Ahern, and Bill Clinton.

Against the backdrop of an impasse in power-sharing talks between the DUP and Sinn Féin, as well as the border-related questions thrown up by Brexit, the anniversary has helpfully re-focused minds on the long view of history and opportunities to build upon the enormous progress Northern Ireland has made over the past twenty years.

In his speech, former-President Clinton asserted that we ‘should celebrate the twentieth anniversary of the Good Friday Agreement, not for what happened, but for what can happen’. He praised the youthful, cosmopolitan generation for whom a return to violence is unimaginable and who are busy building a tolerant, optimistic, and forward-looking society. He also spoke about the ‘economic rewards of peace’ and about Belfast, where ‘business is thriving and opportunities are expanding’.

Quality of life in Belfast, 20 years on

Over the last two decades, Belfast has evolved from a war zone into the city voted the third safest in the UK (Provident). Its emergence as a dynamic global city is a huge and ongoing success story, with financial and legal firms opening offices every week and trendy new communities springing up all over town.

Belfast is ranked 68th out of 450 cities around the world, and the 6th highest in the UK, for its quality of life (Mercer). It was also recently profiled in the Sunday Times as the most affordable and liveable of the UK’s capitals, with schools ‘so good, few people feel the need to go private’, and a booming job market.

Belfast is reaping the dividends of its enduring peace, and this is reflected in its property market.

Market update

According to the latest ONS house price index, Northern Ireland saw prices increase by 4.3% over the course of 2017. The index stands 17.6% higher than at the same point in 2015, yet prices are still 44% below their peak prior to the financial crisis, which impacted Northern Ireland particularly badly (Hometrack). Sustainable rather than spiky growth is favoured by locals, who value affordability and do not wish to repeat the peaks and troughs of 2007-09, so market sentiment is currently very positive.

In its latest survey, RICS said surveyors and agents in Northern Ireland were ‘considerably more positive’ about the market than their counterparts in the UK overall, with 2018 having begun on a ‘firm footing’. Both RICS and Paddy Turley of agent UPS identified the lack of supply as ‘the main frustration’ on the ground, and the leading factor likely to pull up prices (Belfast Telegraph).

With an incredibly tight supply pipeline – only 180 residential units are currently under construction across the city – it is unsurprising that parts of Belfast are catching up the fastest, with BT5 experiencing 6.6% value growth in the year to November (Deloitte, Barclays).

Belfast’s lack of residential supply is particularly acute when seen in the context of its pipeline for hotel rooms (a whopping 1,088 are under construction – six times the number of homes), and office space (453,400 sq ft of which is in progress) (Deloitte).

The volume of construction in the business and tourism sectors also points to a surge in employment which, coupled with a severe undersupply of housing, will particularly benefit the central rental market. Northern Ireland has the joint third-highest rental growth in the UK, at 3.2% in 2017 (Homelet).

Northern Ireland is facing its fair share of challenges, but the strides it has made since April 1998 are a compelling indicator of its resilience and potential.

Author

Paul Avery

Paul joined us in 2016 to lead our in-house research efforts, producing reports and guidance for clients as well as the strategic market analysis behind our new project launches. His background is in sustainability in the construction sector, and he is currently being trained in property valuation to further bulk up his investment creds.
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