Survey finds 'moderate rise' in NI house prices
House prices in Northern Ireland rose moderately by 4.9% in the first three months of this year, a survey carried out by the University of Ulster has indicated.
The report suggested an annual growth rate of 4.9% in the first quarter of this year in contrast to a decline of 35% in the first quarter of 2009.
The overall average price of a house in Northern Ireland for the first quarter of this year was £169,497 compared to £161,429 in the final quarter of 2009.
However, the number of sales reported by the 120 estate agents in the survey rose to 800 throughout January, February and March compared to 692 in the same period last year.
Recovery in the market remains tentative as sales fell to 800 from more than 1000 in the final quarter of 2009, according to the University of Ulster Quarterly House Price Index, produced in partnership with the Bank of Ireland and the Northern Ireland Housing Executive.
The authors of the report, Prof Alastair Adair, Prof Stanley McGreal and David McIlhatton said the latest data highlights the tentative recovery of the housing market.
"However, the findings suggest that recovery is patchy and varies across different property types and areas of Northern Ireland.
"The pace of growth is likely to be impacted by macroeconomic conditions and the steps that the new government takes to reduce the public deficit."
The report uses a weighted index to even out the fluctuations in sample composition.
The authors said the smaller sample size in the first quarter was caused by continuing difficulties in the market, the cold winter and the change in stamp duty which produced a flurry of sales in the final quarter of last year.
The economist Alan Bridle, Head of Economics and Research at Bank of Ireland Northern Ireland, said: "Eastern areas such as Belfast and North Down seem to be seeing some signs of recovery but the picture for Mid Ulster and the west remains particularly challenging.
"The recovery will be patchy and uneven in 2010 and I expect the average house price to remain a little erratic until sales volumes return to more normal levels.
"The market is increasingly influenced by the private rental sector which has grown significantly because investors or owner-occupiers are either unable or unwilling to sell at the new lower price levels, while demand has risen from those who find it harder to obtain a mortgage or who have deferred buying a home in the belief prices will fall further."
The survey confirmed the affordability of housing, with 54% of all properties selling at or below £150,000.
The Housing Executive's Head of Research, Joe Frey said the latest index provides further evidence of stabilisation in the housing market.
"However, bearing in mind the wider economic context and the expected reductions in public expenditure it would appear that the road to a more balanced housing market will be challenging."
The latest survey also showed that the resale market is still not fully functioning, with newly-built houses representing a disproportionately large 39% of the sales.
Although prices rose overall, terraces and townhouses fell in price by 2.3%, while semi-detached houses fell by 4.3%.
However the average price for a detached house rose by 20.7% and semi-detached bungalows increased by 15.6%. Apartments rose by 2.4% and detached-bungalows increased by just 0.5%.
More than 120 estate agents reported similar price trends across Northern Ireland.
The highest average price was in was in North Down - £228,818- while the lowest was in while the lowest was in the Craigavon/Armagh area - £129, 208.
Belfast's average price of £183,498, represents the best performance in the city's housing market since 2007.