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House prices in Northern Ireland are now rising at more than 32% a year, according to the most comprehensive survey of local residential property sales. Some property types in some areas, notably Lisburn, are going up at rates of up to 65%.

The latest University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, paints a picture of unprecedented boom times in the price of homes during the third quarter of 2006 (July to September).

The average house price now stands at £180,128 up by 32.1% on a year before and up by 11.9% over a quarter.

The University’s survey is the broadest-based and most authoritative of all those undertaken in Northern Ireland. In the third quarter it covered a sample of 2,291 housing transactions involving more than 100 firms of estate agents across all areas.

In the latest report, the authors - Professor Alastair Adair, Professor Stanley McGreal and Mrs Louise Brown – say the new levels of house price inflation here pose significant questions.

Prof McGreal said: “The rate of annual increase at over 30% has pushed the local housing market to new dimensions which could not have been predicted

“The big questions are whether this is a spike, how long can such rates of increase continue and what are the long-term implications for the housing market".”

Bank of Ireland’s Head of Research in Northern Ireland, economist Alan Bridle, said there was now ample evidence to suggest that Northern Ireland house prices were comfortably above those in Scotland, Wales and the northern regions of England.

He said: “We are in the throes of a boom of unprecedented proportions. Investors are playing a major role in driving demand, with money from the Republic of Ireland particularly influential in border locations. While some investors are selling to make gains, there is still a queue of buyers waiting to snap up available stock.

“As a result, first time buyers are facing an ever-worsening plight and the latest data shows the number of loans to this category each month has dropped sharply in the past year.”

The report authors pointed out that houses costing below £100,000 were now very few. Only 9% of properties now sold at that level or below – while 59% of the survey sold for more than £150,000.

The Housing Executive’s Head of Research, Joe Frey commented: "It is often too easy to come up with anecdotal evidence which points the finger at one or two key players in the market, who are seen as mainly responsible for the plight of the first time buyer. Lenders are criticised for making loans too easily available, developers for hoarding land, the Planning Service for not making sufficient land available for housing or private investors for outbidding first time buyers. Research being undertaken on behalf of the Housing Executive by the Glasgow University and the University of Ulster shows that it is a much more complex picture than many people realise. This complexity is just one of the difficulties facing Sir John Semple and his team who are trying to grapple with the policy issues designed to address the growing affordability problem."

Since the survey began in 1984, the rate of house price growth in Northern Ireland has been well ahead of the general rate of inflation. The University of Ulster’s House Price Index has surged to a new peak of 691 relative to the 1984 base.


Property Types

All property types showed substantial increases compared with the third quarter of 2005.

The two dominant house types in the survey are now terraced/townhouses and semi-detached houses which together represented 55% of the market in the third quarter. Feedback from agents was of investors and home-buyers competing aggressively in these sectors.

In this survey the highest rate of growth was in semi-detached houses which went up by 37.1% to an average of £172,179.

Terraced/townhouses rose by 35.5% to an average of £142,406.

The apartment market – which has also been a target for investment activity – demonstrated growth of 29.1% to an average price in the third quarter of £143,348.

Semi-detached bungalows also experience high growth, with the average up by 32.3% to £161,108, while detached bungalows rose by 26.7% to an average of £231,251.

Detached houses grew by 27.5% to an average of £273,970.

Over a quarter, the short-term performance across all property types showed the average price rising by 11.9% which, said the report’s authors, indicated major increases over one quarter and supported anecdotal evidence of sales prices greatly exceeding list prices.

Location

All areas of Northern Ireland have seen substantial price increases. The most expensive area remains Lisburn where some properties went up over a year by two thirds. The gap between average prices in Lisburn and in the least expensive area, North Belfast, is approaching £100,000.




Belfast

In Belfast the overall average price of a house was £172,209, a rise of more than 29% over a year. The apartment market, with prices up 42% over the year, led the field with detached bungalows at the bottom of the league with an increase of 13.6%.

The highest priced city location remains South Belfast with an average of £208,270 and is followed by East Belfast with an overall average price of £192,811. The average price in West Belfast increased to £143,575 while the North Belfast average price was £129,570.


Belfast Metropolitan Area

In Lisburn the rate of growth took on a further dimension with a thumping 42.8% gain over the year, with the average house there now costing £226,984 - making it the highest priced area of Northern Ireland. All property types recorded increases but terraced/townhouses rose by an astonishing 65.6%. Semi-detached houses and semi-detached bungalows recorded annual increases of more than 50%.

In North Down, the overall average price of £193,197 represents a significant increase of almost 22.3%, a rate of growth highly comparable to that for the previous three surveys. There were rises across all property types, most notably terraced/townhouses.

For the East Antrim market the overall average price of £140,882 reflected a growth of 28.9%. Terraced/townhouses in this area showed a staggering 50.3% rise over the year.

North and North West

In Antrim/Ballymena the overall average house price rose by 21.5% to £171,248. This rate of growth was well below what was recorded in the second quarter. In the latest survey most types of property advanced significantly.

In Coleraine, Limavady and the North Coast, the growth was 17.8%% taking the average price just over the £200,000 mark for the first time (£200,550). The figures showed a slowing of growth compared to the previous quarters this year.

In Derry/Strabane the strong growth in the market was sustained with an annual rise of 23.2% bringing the average house price to £147,053. Terraced and townhouses performed the best.

The West

The Mid-Ulster market average price was £181,087, up 26.3% over a year, while in Enniskillen/ Fermanagh/ South Tyrone the average sale price exceeded £200,000 (£209,965), up 25.7% across the year.

The South

In Craigavon/Armagh the annual increase was a massive 49% taking the overall average price to £176,145 with major rises across all types of houses. Mid & South Down markets performed strongly increasing the average home price over the year to £207,506, reflecting an unprecedented annual increase of 45%.

Ends

Notes to Editors: TABLES

Annual increase by property type


Market sector Annual change Average Price
Quarter 3, 2006
Terraced house 35.5% £142,406
Semi-detached house 37.1% £172,179
Detached house 27.5% £273,970
Semi-detached bungalow 32.3% £161,108
Detached bungalow 26.7% £231,251
Apartment 29.1% £143, 348

Average house price by region

Location Average Price
Quarter 3, 2006
Northern Ireland -All £ 180,128
Belfast - All £172,209
North Belfast £129,570
South Belfast £208,270
East Belfast £192,811
West Belfast £143,575
North Down £193,197
Lisburn £226,984
East Antrim £140,882
L'derry/Strabane £147,053
Antrim/Ballymena £171,248
Coleraine/Limavady/N. Coast £200,550
Enniskillen/Fermanagh/
S.Tyrone £202,965
Mid Ulster £181,078
Mid & South Down £207,506
Craigavon/Armagh £176,145




Media contacts:
For University of Ulster: David Young, Press Office, University of Ulster 02890 366074
For Bank of Ireland: Catherine Agnew at IAS SMARTS 028 9039 5500.
For NIHE: Imelda McGrath or Jim Murray 028 9031 8700

For further information, please contact:

Press Office Department of Communication and Development
Telephone: 028 9036 6178
Email: pressoffice@ulster.ac.uk