House prices 'expected to rise'
HOUSE prices should begin rising this year as Northern Ireland's property slump eases, an expert has said.
The rate at which house prices are falling has hit seven per cent, compared to 35 per cent at the start of last year, the University of Ulster research said.
The number of sales hit its highest level for over a year.
The report authors said: "This latest survey indicates an improving housing market.
"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 number of house sales was 704 in the final quarter of 2008 compared to 1,050 in the final quarter of 2009, the University of Ulster House Price Index said.
It put the overall average cost of a house in Northern Ireland in the fourth quarter of 2009 at 161,429.
Economist Alan Bridle, head of economics and research at Bank of Ireland 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 rebound in average prices and there is still a risk of them slipping further."
The survey again showed property was becoming more affordable, with 57 per cent 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 per cent.
The latest survey again confirmed the problems of getting the resale market fully functioning, with newly-built houses, at 32 per cent of the total, taking a disproportionately large percentage of the sales.
Housing Executive head of research Joe Frey said: "The increase in the level of transactions is 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.
"The private rented sector will therefore play a much bigger role in Northern Ireland's housing market in the future."
The highest priced city location was south Belfast (203,649), followed by the east (175,786), west (127,298) and north (115,799).
North Down's average house price of 186,272 represented a slightly improved market over the year and was one of the few locations to show an overall price increase for the year at 1.2 per cent.
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