NI House Prices Hit 'Five Year Low'

The average house price in Northern Ireland has fallen below £150,000 for the first time in nearly five years, according to University of Ulster research.

The latest University of Ulster Quarterly House Price Index - produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive - covered the third quarter of 2010 and put the average overall price at £148,243. This represented a weighted rate of annual decline of 7.6%.

The survey said that the tentative recovery in house prices in the first half of this year had been put on hold, or even reversed.

The authors of the report - Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton - said: "The significant fall in house prices stems from a current lack of confidence in the market possibly reflecting concerns about public spending cuts and their impact on jobs in a region highly dependent on public sector employment."

The price statistics are based on 795 transactions in the third quarter of 2010, a figure well down on the second quarter volume of 1009 transactions.

Alan Bridle, UK Economist, Bank of Ireland, commented: "With the average price below £150,000 for the first time since the last quarter of 2005, it is clear the residential market is still facing a number of challenges.

"Potential buyers remain discouraged by uncertainty over economic prospects and in terms of supply there is no shortage of houses available to buy or to rent.

"A particular theme of this survey is that the previously resilient market in Belfast has been less strong in the third quarter – and turnover of properties remains weak by historic standards."

The survey indicated that the market is becoming increasingly affordable, with more than a quarter of houses selling at or below £100,000. Collectively, nearly two thirds of the total sold at £150,000 or below.

The Housing Executive’s Head of Research, Joe Frey, added: "Given the fragility of Northern Ireland's economy and the imminent cuts in public expenditure, it is little wonder that the housing market is turning down again.

"However, despite the resultant lower house prices, affordability will remain a difficult issue for first time buyers for as long as banks and building societies continue to allocate mortgages on the basis of very restrictive lending criteria."

Performance by property sector in general reflected the overall decline, although bungalows performed better than others. The average price for apartments fell by 17% over a year to £119,716, for semi-detached houses it fell by 12.5% to £130,956, for detached houses by 7% to £252,581 and for terraced/townhouses by 5.6% to £107,407. Semi-detached bungalows rose by 10.6% to £131,439 and detached bungalows increased by 4.2% to £195,636.

(GK/BMcC)