A study by Nationwide has revealed the average house price here has dropped by 18 per cent, compared to the same period last year.

The average figure now stands at £183,476 compared to approxiamtely £215,000 in June 2007.

Many experts believe estate agents were facing closure and redundancies because of the current market.

The situation is presently in a state of flux as prospective sellers take their homes off the market while first-time buyers consider their options.

Professor Alasdair Adair from the University of Ulster said the drop in the level of activity in the housing market was "unchartered territory" for Northern Ireland.

"We know there are people out there who want to buy at the moment.

"The problem is getting the capacity to borrow money and therefore we need to get some stability back into the lending market," he said.

A three-month view by Nationwide predicts further decline in the local market.