Northern Ireland house prices reach all time high

House prices in Northern Ireland have risen to an all time high according to figures released today from a study at the University of Ulster.

The cost of property in the province has risen by 22%, making the price of the average home approximately £146,000.

The biggest increases were in the prices of apartments, terraced houses and townhouses.

Although the news is good for homeowners, it sets further obstacles in the way of people trying to break into the property market.

One of the authors of the report, Professor Stanley McGreal, said: "The growth in prices means that only a quarter of house sales are now below the £100,000 mark and that raises concerns about the ability of first-time buyers to enter the market."

Bank of Ireland’s Head of Research in Northern Ireland, economist Alan Bridle, added: “The survey shows that the average Northern Ireland family earned more than £500 a week last year just by sitting in their house. It is a remarkable figure when viewed against the average Northern Ireland salary of £20,000 a year.

“The reality is that gains like this are only on paper, but consistent house price inflation on this scale promotes a feel-good factor among consumers.”

Mr Bridle continued by saying that the rate of the increase was ultimately unsustainable but he did not see any sudden crash in the housing market while borrowing remained cheap and the investment market was so strong.

The Housing Executive’s Head of Research, Joe Frey, said: “A rate of increase of more than 20% would seem unsustainable even in the medium term. In the UK as a whole the annual rate of increase in house prices fell fairly steadily between September 2004 and December 2005 to around 3%, before showing signs in January of a slight recovery.

Mr Frey concluded by saying that it is always very difficult to predict exactly when such a change of direction will occur, however, in the case of Northern Ireland, it will probably be sooner rather than later.

(EF/SP)