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House price falls in Northern Ireland

Catherine Deshayes

Following years of unprecented growth, property prices in Northern Ireland have begun to stagnate, says the University of Ulster

The Universtity's research shows that average property prices dropped off by 4% during the last few months, when compared to the same period during the booming property market of 2007.

At the peak of the market last year, property prices in Northern Ireland were increasing by 51% annually. At the end of 2006 and the beginning of 2007, prices there were rising faster than anywhere else in Europe, according to the RICS European Housing Review.

The cost of Northern Ireland property increased by an average 36% in 2006, more than three times the figure for the UK as a whole.

RICS Northern Ireland spokesman Tom McClelland said growth had been solid.

Fast forward to this year and things are not quite so rosy. Whilst the market was boosted by apartment sales, which continue to run counter to the general market trend; prices of semi-detached properties fell by 18.6%.

There has also been a dramatic slump in property transactions, with some estate agents in Northern Ireland finding sales to be down 50% year on year.

The overall average price of a house in Northern Ireland in the last few months was £226,934.

Alan Bridle, Head of Research at Bank of Ireland, Northern Ireland, said, "The survey shows price changes vary widely across different parts of Northern Ireland and across the types of properties, so people should be cautious about making over-simplistic judgments.

"For instance, there are different factors affecting both the resale and the new-build markets.

"There is no precedent in this region for what is happening in terms of a genuine housing cycle, so we are on a journey through the unknown - which itself is feeding the uncertainty.

"However, with a very quiet resale market, I believe there is a high probability of the average price dropping closer to the £200,000 level before the end of year, with a period of adjustment stretching into 2009.

"Anyone looking for the green shoots of recovery should keep an eye on transaction levels which are likely turn before prices do - but it might be a while," Mr Bridle added.