The overall average house price in Northern Ireland has comfortably passed £200,000 for the first time, according to UU research.

The latest University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, and covering the first three months of 2007 showed prices up 46% over the year and by 11% over the quarter. The figures suggest that rather than slowing down, the market moved (is moving) in the opposite direction as prices rose further still in the period to the end of March.  

The average house price in Northern Ireland is now £215,590 putting it ahead of Scotland, Wales and the whole north of England.

The University’s survey is the broadest-based and most authoritative of all those undertaken in Northern Ireland. In the first quarter it covered a sample of 2,120 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 there is no early sign of the market slowing-up despite recent interest rate rises, although they point out there can be a delay in how quickly such changes impact on the market.

Mrs Louise Brown said: “The Northern Ireland housing market is still strongly influenced by the role of investor activity which has driven price levels to new record highs in the first quarter of 2007, though our expectations are for lower rates of increase as the year progresses.”

Bank of Ireland’s Head of Research in Northern Ireland, economist Alan Bridle, said the survey confirmed that the region remained in the throes of an unprecedented price boom in the early part of this year although he cautions that the long awaited moderating of price inflation may already be underway

He said: “The survey shows that we are living through remarkable times in Northern Ireland, however in time, the first quarter of 2007 may prove to be the high watermark as far as Northern Ireland’s rate of residential inflation is concerned.   

“Since Easter, close observation of the housing market would suggest that at long last, the local price boom may be starting to come off the boil with a return to a more normal market. Evidence to date is largely anecdotal, but it will be a major surprise if we are not reporting a slower rate of inflation in our next survey in the late summer.”

With the shrinkage in the number of houses selling at or below £100,000, the survey once again highlights the issue of affordability, particularly for first-time buyers. Property at or below £100,000 accounted for only 2% of properties in the survey sold – virtually eliminating them from the survey,  17% were in the £100,000 - £150,000 bracket compared to 26% in the last quarter and 35% were in the £150,000 to £200,000 price range. Some 24% sold for between £200,000 and £250,000 and a further 22% were sold for above £250,000. 12% of the sample went for at or above £300,000.

The Housing Executive’s Head of Research, Joe Frey commented: “This latest price increase only reinforces the urgency of the need to address the affordability problems faced by first-time buyers throughout Northern Ireland. 

"The new Minister responsible for Housing, Margaret Ritchie, faces an increasingly challenging task.  In order to tackle the problem successfully the Minister needs the support of the Department of the Environment, Department for Regional Development, and Department of Finance and Personnel as well as the private sector.  However, we may already have seen the start of a reversal of the trend towards increasing owner occupancy, with more newly forming households having no alternative but to enter and remain in the private rented sector for much longer periods."

Since the survey began in 1984, the rate of house price growth in Northern Ireland has been significantly above the general rate of inflation – a key reason for the high level of investment in the housing market. The University of Ulster’s House Price Index has reached another new peak of 850.6 relative to the 1984 base.

Property Types

The report says all property types have performed strongly with highly significant increases in average price over the year.

Leading the market – semi-detached houses and bungalows - rose by almost 53% and 51% respectively to new average prices of £213,386 and £199,397.

The strong performance of terraced/townhouses – up by 47% to an average price of £177,349 and apartments up by a similar amount over the year to £183,616 – equates with many agents perspective that these are the types of property most sought after for the buy-to-let/investment market and by first-time buyers. 

Detached bungalows increased by 46.5% to £269, 636. Detached houses saw the lowest rate of annual growth of 35.8% to £322,963 and yet still saw a major increase in average price compared to the first quarter of 2006. 

Over the first quarter of 2007, the short-term performance across all property types showed the average price rising by 11.4% which, said the report’s authors, is greater than the growth rate for the final quarter of 2006.

Location  

Findings from this survey indicate that across all market areas average prices have risen substantially though there is significant variation by location. 

Belfast

In Belfast the overall average price of a house was £207,543, an increase of 43.1% over the year. The market leaders in Belfast were semi-detached houses and terraced/townhouses which went up by 54.6% and 53.2% to £231,984 and £182,998 respectively.  

The highest priced location within the city remains South Belfast with an average price of £256,524.

The next most expensive area in Belfast is East Belfast with an overall average price of £228,469. North Belfast with an average price of £178,050 fell behind West Belfast where the average was £182,176.

Belfast Metropolitan Area

In Lisburn while growth rates were less spectacular than in recent reports there was still an annual increase of 37.2% to £259,035. All sectors saw significant annual increases – the rate of growth for detached houses and semi-detached bungalows was 54% while semi-detached houses followed closely at 53%. 

In North Down, the overall average price increased to £226,419 representing annual growth of 36% which is significantly higher than the growth rates reported throughout 2006. There was some variation across property types but the market leader in this area was terraced/townhouses with a 54.9% rise to £178,476.

The East Antrim market had an extremely high rate of increase of 56.4% over the year, with the overall average price reaching £187,972.   

North and North West

In Antrim/Ballymena the market grew significantly over the year, by 34.5% to £208,900. All sectors of the market advanced significantly.

In Coleraine, Limavady and the North Coast the quarterly dip seen in the previous survey was replaced with an annual rate of increase of 54.6% to £256,032 with all sectors of the market seeing major rates of increase. Both detached bungalows and apartments saw phenomenal rates of increase of 76.4% and 73.2% to £310,654 and £230,250 respectively. 

In Derry/Strabane the price growth has been sustained at a consistent level with an annual rise of 28.5%, bringing the average house price to £180,818 with all sectors of the market growing significantly in average sale price.

The West

The overall average price for the Mid-Ulster market saw major growth of nearly 50% to £244,293.  All sectors saw substantial rates of increase but terraced/townhouses led the market with a 65% growth rate to £202,000. 

In Enniskillen/ Fermanagh/ South Tyrone the average sale price grew by 26%, lower than that for Northern Ireland and many other market areas,       to £213,569.  Semi-detached houses did best, increasing by more than 40% to £190,906.

The South

In Craigavon/Armagh the annual increase was a significant 54% taking the overall average price to £222,617. Semi-detached houses rose by a staggering 66.9% to £211,178 and detached bungalows grew 66.3% to £260,588.  

Despite a drop back from the significant growth rates seen in the second half of 2006, mid & south Down markets continued to perform well increasing the average home price over the year to £219,526, reflecting an annual increase of 30.8%. 

For further information, please contact:

David Young
Telephone: 028 90366074
Email: David Young