Issued on behalf of University of Ulster, Bank of Ireland Northern Ireland and the Northern Ireland Housing Executive

Highlights of latest survey

·     The annual growth rate in Northern Ireland house prices in the first quarter of 2005 was 15.5% 

·     The overall average price of a house in Northern Ireland is now £122,661

·     The value of the NI House Price Index has risen to a new peak of 467.91  

Northern Ireland’s housing market is still growing strongly with annual house price inflation now running at 15.5%, according to the region’s most authoritative survey of house prices. 

The latest University of Ulster Quarterly House Price Index produced in partnership with Bank of Ireland and supported by the Northern Ireland Housing Executive covers the first quarter of this year and shows a quarterly increase in prices of nearly 4% over the final three months of 2004.

The survey conducted by the University from January to March this year covered a sample of 2,037 housing transactions on the open market. It showed that the overall average price of a house in Northern Ireland rose strongly to reach a new high of £122,661.

The authors of the House Price Index - Professor Alastair Adair, Professor Stanley McGreal and Louise Brown of the University of Ulster - said: “The growth in prices compared to the start of 2004 is at the high end of everyone’s expectations and signifies that the local property market has been much more robust than anticipated.

“An area of concern will be the falling proportion of houses that come within the £50,000 to £100,000 ‘starter’ band, which raises issues around affordability.”

With the average price of a house having risen by £300 a week over the past year, Bank of Ireland’s Head of Research in Northern Ireland, economist Alan Bridle, said the natural question was whether prices would go on rising.

“The answer is definitely yes - homeowners have a number of reasons to be cheerful. The local economy will see steady growth again this year, interest rates are likely to remain stable, the buoyant investor market is offsetting lower numbers of first time buyers and there are savings for buyers as a result of the rise in the Stamp Duty threshold in the Budget.

“Last year we estimate about 10% of houses here were exempt from Stamp Duty. Under the new rules this figure could rise to about 65% - and for individuals it means savings ranging from £600 to £1,200.”

House price increases are apparent in nearly all areas of Northern Ireland, with the north and north-west showing high rates, but with a drop in prices in Craigavon/Armagh after a strong performance there in the last quarter of 2004.

The value of the Northern Ireland House Price Index, which is calculated relative to the base quarter for the survey in 1984, has risen significantly to a new high of 467.91.

The Housing Executive’s Head of Research Joe Frey said: “Since the surge in house prices in Northern Ireland tracking and addressing affordability has become an important strategic objective of the Northern Ireland Housing Executive. From the Housing Executive’s research it is clear that between 2001 and 2004 the affordability gap has widened particularly for first time buyers. There is no doubt that five successive interest rate increases since November 2003 have taken their toll on purchasing power. The Housing Executive is encouraging statutory agencies Banks, Building Societies and Developers must work together to tackle the problem.”

Property Types

All sectors of the market showed significant increases in prices, with the apartment sector starting to show growth in capital values after a sluggish period.

Of particular significance - given their high market share - were terraced and townhouses which increased over the year by more than 22% to an average of £93,490. This growth means there is a diminishing number of homes in the £50k-£100k bracket on the market. As this band is the traditional entry point for many first time buyers, this increase may add to concerns about affordability, the authors of the report said.

Detached bungalows with an average price of £164,546 were also up by almost 23% while semi-detached bungalows rose by more than 18% over the year to an average of £110,095.

Price growth in the semi-detached and detached house markets was between 12 and 13%, with an average price for the former of £113,487 and £183,756 for the latter. Between them, these two house types account for 45% of the market.

Apartments showed a uplift in prices in the first quarter. The average price went back above the £100k mark to £104,735, an annual increase of just over 6% but there was an uneven performance at local level. Apartments now represent 11% of the properties in the survey.

Performance by region 

House prices vary across Northern Ireland but for most areas the average price has shown an increase.

In Belfast the overall average price of £117,356 reflected an annual rate of growth of 11.7%. All sectors of the market showed growth.

The highest priced city location is still South Belfast with an average of £145,479. East Belfast with an overall average price of £140,678 is the next highest priced location. Price levels in West Belfast rose significantly to an average of £102,467, while North Belfast has the lowest price structure with an average overall house price of £85,184.

In North Down, the average price of £134,737 represents a substantial annual rate of increase of 17.6% and this was evident across all property types. The best performing sectors were semi-detached houses up 23%, detached homes up 22% and semi-detached bungalows up 20%.

Lisburn displayed a different pattern, with slower rates of growth following a surge during 2004. The overall average there is £131,018 representing a modest annual increase of 2.7%. There was considerable variations in property types with terraced/townhouses up 27% over the year, semi-detached bungalows up 23% and semi-detached houses up 20%. However, detached bungalows fell by 5.57% and there was a drop of nearly 3% in the average price of a detached house.

For the East Antrim market the overall average price of £105,083 has increased by nearly 15% over the year and by almost 4% over the previous quarter. All sectors of the market here, except apartments, showed an annual uplift.

In the north and north west the picture is one of high annual rates of increase. In Antrim/Ballymena the overall average price of £126,162 is up by 23% compared to the same period last year with all sectors of the market performing strongly.

In Coleraine, Limavady and the North Coast the overall average price surged by almost a third over the year to £135,851 reflecting high rates of increases in all types of property. Quarterly performance also showed strength with an increase in the average by more than 6%.

In Derry/Strabane the overall average price has again risen substantially to £107,945, up almost 21% on the same period a year ago.

In the west, the Mid-Ulster market has increased to £130,083 representing an annual growth rate of 15.3%, very close to the Northern Ireland average, with a similar picture in Enniskillen/ Fermanagh/ South Tyrone market where the annual increase was 15.5% to an average house price of £131,467.

In the south, Craigavon/Armagh recorded a fall in the average price of a house, both over the year and on the previous quarters. The average price of £103,468 represents a fall of 3.6%. Most of the price reduction was due to a weaker first quarter performance with the market not sustaining the high price levels seen in the last quarter of 2004.

Mid & South Down showed a contrasting pattern with the overall average up by 16.5% to £128,509. While quarterly performance was slightly more variable over different house types, the overall average was up 2.7%.

For further information, please contact:

David Young
Telephone: 028 90366074
Email: David Young