House Market Recovery 'Patchy'

Any recovery in the Northern Ireland housing market is still patchy, according to the latest University of Ulster research.

Average house prices have increased by around 2.1% in the third quarter.

This brought the average property value to £164,017 compared with £158,886 in the second quarter.

However, this growth was not reflected in all areas of Northern Ireland.

The Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, is the most broadly-based and authoritative of all those undertaken in Northern Ireland.

It covers around 120 estate agents and records all open-market transactions, not just those involving mortgage lenders.

Report authors Professor Alastair Adair, Professor Stanley McGreal, Louise Brown and David McIlhatton said: "The recovery in the housing market is still piecemeal.

"Positive signs are the declining rates of annual price decrease across the different sectors of the market and an overall weighted increase over the last quarter of 2.1%.

"But sales transactions, at best, are only a third of the volume expected under normal conditions, suggesting that the market still has some distance to go."

Bank of Ireland economist Alan Bridle said the overall climate for housing remains "challenging".

"The quarterly increase in the average price disguises a patchy and uneven performance between locations - with evidence that the more rural areas in the west are lagging behind the Belfast area."

He said there is "little substantive evidence" to suggest a real breakthrough in the number of first-time buyers entering the market, which Mr Bridle suggested would be a "key ingredient" in any broader recovery.

"While the end of the recession may be in sight, the legacy of a difficult economic and financial backdrop will remain. Rebuilding confidence may therefore take some time."

The average house price in Quarter 3 this year was £164,017 compared with £203,775 in Quarter 3 2008.

This represents an annual weighted decline of 19.2%. The annual rate at which house prices are falling is therefore continuing to slow down, from 29.5% in the second quarter this year and 35% in the first quarter.

According to the authors, the downward price correction in Northern Ireland housing may have "run its course" and the market could be entering a phase characterised by small fluctuations in average price levels.

In total, 20% of properties in the latest survey sold at or below £100,000. Nine out of ten houses sold at or below the £250,000 mark.

As the weighted average takes into account the price and volume of each property type, it always differs slightly from the simple average change.

In this survey the weighted increase over the quarter is 2.1% whereas the simple average increase is 3.2%.

(PR/KMcA)