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Last Updated: Wednesday, 28 February 2007, 06:34 GMT
NI housing market to slow in 2007
Houses for sale
House prices in Northern Ireland will continue to rise in 2007
A 37% rise in NI's property prices in 2006 has led to speculation that the market could slow significantly this year, according to the latest survey.

The University of Ulster's house price index found the average price of a house in NI is now 195,751.

However, despite warning of a slowdown, the report said NI property prices would rise by about 15% in 2007.

The Bank of Ireland said it confirmed NI had the most inflationary residential market in Europe.

We expect the growth to slow, however, to something of the order of 15% in 2007
Alan Bridle

The bank's head of research in Northern Ireland, economist Alan Bridle, said: "The survey shows the old year went out with a bang and the momentum is likely to be carried into at least the early months of 2007.

"We expect the growth to slow, however, to something of the order of 15% in 2007 - perhaps higher in the early months but cooling off as the year unfolds.

"Even then, that growth would be comfortably above what our neighbours in the Republic of Ireland and Great Britain can expect."

The report, which covered a sample of 2,507 housing transactions involving more than 100 firms of estate agents, found Northern Ireland's prices rose by 10% during the fourth quarter of 2006.

However, its authors - Professor Alastair Adair, Professor Stanley McGreal and Mrs Louise Brown - warned the current rate of growth could not last indefinitely.

Mrs Brown said: "Clearly rates of increase of such magnitude cannot be sustainable over a long period of time and they raise the question as to whether and when there will be a market correction."

The authors also pointed out that the report largely reflected the market prior to the two most recent rises in interest rates - which have put up mortgage repayments.

They also suggested that the high rate of investor activity in the Northern Ireland property market may not be maintained.

First-time buyers

With the average house price approaching 200,000, the survey again highlighted the issue of affordability, particularly for first-time buyers.

Only 4% of properties in the survey sold for less than 100,000, 26% were in the 100,000 - 150,000 bracket and 35% were in the 150,000 - 200,000 price range.

Some 17% sold for between 200,000 and 250,000 and 18% went for sums above that.

The Housing Executive's Head of Research, Joe Frey said: "The latest update of the Housing Executive's Affordability Index (2006) indicates that first-time buyers are experiencing serious difficulties throughout Northern Ireland.

"Indeed, the areas in which the most serious problems are found now appear to be in more peripheral rural district council areas where, for example, falling farm incomes, the decline of traditional manufacturing employment and the growth of second homes have combined to exacerbate the problem."

Annual percentage increases by property type
Market sector Annual change
Terraced house 41.9%
Semi-detached house 40.1%
Detached house 40.7%
Semi-detached bungalow 34.2%
Detached bungalow 32.9%
Apartment 22.2%
Source: University of Ulster Quarterly House Price Index

Average house prices by region
Location Average price Q4
Northern Ireland - All 195,751
Belfast - All 191,819
North Belfast 152,145
South Belfast 241,390
East Belfast 211,925
West Belfast 143,384
North Down 202,300
Lisburn 231,168
East Antrim 164,171
Londonderry/Strabane 173,462
Antrim/Ballymena 194,189
Coleraine/Limavady/N Coast 198,711
Mid Ulster 219,489
Enniskillen/Fermanagh/S Tyrone 222,522
Mid Ulster 128,861
Mid & South Down 221,367
Craigavon/Armagh 180,848
Source: University of Ulster Quarterly House Price Index

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