Average house prices down £36,000 since last year

The analysis reveals the Northern Ireland average (£139,691) - marginally up on the second quarter of the year - still teeters at a six year low.

Houses cost an average of £111,794 in Londonderry and Strabane over July, August and September, which was 4 per cent (£4,821) cheaper than in the previous quarter.

Only in Craigavon/Armagh (£108,725) and North Belfast (£103,725) was the average price of a house lower. In neighbouring Coleraine/Limavady/North Coast the average price was £138,773.

The latest University of Ulster (UU) Quarterly House Price Index produced in partnership with Bank of Ireland (BOI) and the Northern Ireland Housing Executive (NIHE), showed transactions across NI in the third quarter of this year was 1,133 compared to 1,062 in the previous quarter.

The overall average price of a house in Northern Ireland was £139,691, up on the £137,814 recorded in the second quarter of the year.

This meant the weighted rate of annual decline slowed to 7.5 per cent from 15.3 per cent recorded in the second quarter of this year.

According to the authors of the report - Professor Alastair Adair, Professor Stanley McGreal and Dr David McIlhatton - the housing market is continuing to demonstrate volatility, although activity levels have improved the market is still in a state of correction from what was arguably the deepest downturn ever experienced in Northern Ireland.

“There has been renewed activity in the third quarter of the year and slightly improved average prices for a number of sectors within the market. We see a return to more normal conditions being a slow process over a period of time rather than any major short-term change in market sentiment,” they said.

Quarterly price performance relative to the second quarter of the year showed a marginal 0.1 per cent weighted rate of increase in prices despite the presence of a significant number of low priced properties in the sample.

Alan Bridle, UK Economist, Bank of Ireland UK, said: “This survey presents a slightly more positive picture although behind the headlines a number of market dynamics are at play including some contrast in performance between parts of Greater Belfast and our provincial and rural areas and a continuing element of stock clearing, particularly of lower value properties.

“The winter months will inevitably see some seasonal influences on activity levels and it is likely 2011 will mark the fourth consecutive year of house price decline. The region is learning, at some cost, that housing market cycles are typically extended and pronounced.”

The Housing Executive’s Head of Research, Joe Frey, welcomed the report as further evidence of a more robust housing market and noted that “although first time buyers are still facing difficulties in terms of accessing mortgage finance and continuing uncertainty in the labour market, house price to income ratios clearly show that in comparison to a few years ago Northern Ireland’s housing market is now much more affordable.”

The survey, which covered some 120 firms of estate agents, showed that 69% of properties sold at or below £150,000 during the quarter, demonstrating that the price structure of the market had remained consistent during this year – an indication of stability returning to the market.