Page last updated at 16:37 GMT, Monday, 16 November 2009

NI house price recovery 'patchy'

Sale signs
The average price was 164,017 in the third quarter of 2009

The downturn in the Northern Ireland housing market may have run its course, a survey by the University of Ulster has suggested.

The report's authors said the market could be entering a phase characterised by small fluctuations in average price levels.

The average price in the third quarter of 2009 was £164,017 compared with £158,886 in the second quarter.

The authors said "the recovery in the housing market is still piecemeal".

The authors of the report, Professor Alastair Adair, Professor Stanley McGreal, Louise Brown and David McIlhatton, said the market was still fragile.

The quarterly increase in the average price disguises a patchy and uneven performance between locations
Alan Bridle

"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," they said.

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 Metropolitan Area.

"There is little substantive evidence as yet of a real breakthrough in the number of first-time buyers entering the market. This would be a key ingredient in any broader recovery.

The survey indicated improving levels of affordability

"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."

Housing Executive Head of Research Joe Frey welcomed what he said were growing signs of stabilisation in the housing market.

"However, the publication of the 100th edition of the House Price Index provides a timely opportunity to remind everyone involved in the housing market of the perils of ignoring the invaluable evidence base that these reports have provided over a 25-year period," he said.

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.

The survey indicated improving levels of affordability. 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.

The University of Ulster Quarterly House Price Index is produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive.

It is the 100th Quarterly House Price Index to be published.

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