Page last updated at 06:13 GMT, Friday, 15 May 2009 07:13 UK

NI house prices drop 35% in year

Sale signs
NI estate agents sold 692 properties in a three-month period

House prices in Northern Ireland fell by 10.8% in the first three months of this year, a survey has found.

Prices showed a year-on-year drop of 35% in the first quarter of 2009, the University of Ulster survey found.

With an average of £157,000, prices are already back at the pre-property boom levels of early 2006, but experts said prices had not yet reached the bottom.

The volume of transactions remained low, with just 692 sales during January, February and March.

The decline in property values did slow from the 16.6% fall in the last three months of 2008, according to the University of Ulster Quarterly House Price Index, produced in partnership with the Bank of Ireland and the Northern Ireland Housing Executive.

A slight cause for optimism for the authors - Professors Alastair Adair and Stanley McGreal and Mrs Louise Brown - was that the high level of volatility in the housing market would decline rapidly over the course of the year as price levels begin to consolidate.

The survey shows the restoration of affordable housing in Northern Ireland is well advanced
Alan Bridle

"The downward correction in the market is likely to be as dramatic as the steep increase in 2006 and the start of 2007 - we expect the trend in the price index will flatten out by the end of the year," they wrote.

Economist Alan Bridle, Bank of Ireland head of research in Northern Ireland, said prices had fallen by almost 40% from their peak.

"It is unlikely we have yet reached the absolute trough in the price cycle, with the notable exception of the new-build segment, but the survey shows the restoration of affordable housing in Northern Ireland is well advanced," he said.

The Housing Executive's Head of Research, Joe Frey, said their latest affordability index confirmed the significant improvement in the ratio of incomes to house prices.

'Challenging times'

However, he warned: "Difficulties in obtaining mortgage finance continue and, more importantly, rising unemployment and growing economic uncertainty would indicate that first-time buyers will continue to face challenging times.

"It is important that a well-managed private rented sector and a sufficient number of new social dwellings are provided to help younger households, in particular, through this difficult transitional period."

Overall, 19% of properties in the latest survey sold for below £100,000, while the majority of houses (55%) sold for less than £150,000.

There were wide variations in the size of the price fall in the first quarter, depending on the type of property.

While detached bungalows were down 15.4% and semi-detached bungalows by 14.5%, detached houses performed much better and only fell by 1.8% in the three-month period.

Apartments were down by 9.1%, semi-detached houses by 8.9% and terraced/townhouses by 6.6%.

More than 120 estate agents reported similar price trends across Northern Ireland.

The highest average price was in North Down - £177,785 - while the lowest was in the Craigavon/Armagh area - £131,703.

Belfast's average price of £155,483 was the highest annual percentage drop of 38.8%m well over double the lowest - the 15.4% recorded in the Antrim/Ballymena area.

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