Boost for housing market

The latest survey of house prices in Northern Ireland has suggested the market showed signs of recovery in the last three months of 2009.

The report, by the University of Ulster and the Bank of Ireland, put the overall average price of a house in Northern Ireland at 161,429.

It also showed the number of transactions was at its highest level for the past two years.

The report's authors said the survey indicated an improving housing market.

It also said the rate of house price decline had dropped from 35% at the start of 2009 to just below 7%.

"Although overall average prices are still down, the rate of price decline has slowed significantly, with prospects for a modest increase in price levels during 2010," the report said.

However, one Ballymoney estate agent told the Times that those involved in the housing trade “were far from out of the woods yet”.

“This is a welcome development,” he said.

“However, the onus is very much on the banks to increase lending.

“It is still difficult for first time buyers to get onto the property ladder and they are essential for future recovery.”

The report said price statistics were based on a sample of 1,050 transactions in the fourth quarter of last year.

Although transaction levels are about half of what would be expected under normal conditions, the report said there had been a significant increase in the number of sales from recent surveys and suggested a recovery in the market could be under way.

Economist Alan Bridle, head of economics and research at Bank of Ireland in Northern Ireland, said: "The real mark of recovery in our housing market will be a pick-up in the number of transactions. This survey sounds an encouraging note.

"Steady progress in activity levels may be the most likely and desirable scenario for this year but in my view we should not expect much of a re-bound in average prices and there is still a risk of them slipping further."

The survey indicated improving levels of affordability.

The survey again showed property was becoming more affordable, with 57% of all properties selling at or below 150,000.

Mr Bridle added that first-time buyers, although having to find higher deposits, now had lower debt-servicing costs. He said interest payments as a percentage of income were now back at "pre-boom" levels of around 14%.

The Housing Executive's Head of Research, Joe Frey, said the increase in the level of transactions was to be welcomed as an indication that the housing market is returning to more normal conditions.

"However, we foresee continuing difficulties both for first-time buyers and for households looking for a social dwelling," he added.