05/12/2006

NI house prices rise dramatically

House prices in Northern Ireland are now rising at more than 32% a year, according to a survey of local residential property sales.

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

The survey also shows that some property types in some areas, notably Lisburn, are going up at rates of up to 65%.

The average house price now stands at £180,128 an increase of 32.1% from the previous year and up by 11.9% over a quarter.

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

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.

All areas of Northern Ireland have seen substantial price increases, with the most expensive area remains Lisburn where some properties went up over a year by two thirds.

In Belfast the overall average price of a house was £172,209, a rise of more than 29% over a year.

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.

In North Down, the overall average price of £193,197 represents a significant increase of almost 22.3%.

For the East Antrim market the overall average price of £140,882 reflected a growth of 28.9%, while in Antrim/Ballymena the overall average house price rose by 21.5% to £171,248.

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.

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.

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.

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%.

(EF)

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