Average house price in North falls below £150k

HOUSE prices in the North continue to tumble, with the average value of a house dropping below £150,000 (€175,616) for the first time in five years.

The latest snapshot of the region’s property market recorded a 7.6% drop in prices from the same time last year.

The average overall cost of a home is now £148,243 (€174,809), according to the University of Ulster quarterly house price index. The survey, compiled in conjunction with the Bank of Ireland and the Northern Ireland Housing Executive, found the signs of a slight market recovery earlier this year had been put on hold, or even reversed.

Co-author of the report Professor Alastair Adair said: “The significant fall in house prices stems from a current lack of confidence in the market, possibly reflecting concerns about public spending cuts and their impact on jobs in a region highly dependent on public-sector employment.”

Professor Stanley McGreal and Dr David McIlhatton worked with Prof Adair in compiling the survey. The statistics are based on 795 transactions in the third quarter of 2010, well down on the second-quarter volume of 1,009 transactions.

Bank of Ireland British economist Alan Bridle said: “With the average price below £150,000 for the first time since the last quarter of 2005, it is clear the residential market is still facing a number of challenges. Potential buyers remain discouraged by uncertainty over economic prospects and, in terms of supply, there is no shortage of houses available to buy or to rent.

“A particular theme of this survey is that the previously resilient market in Belfast has been less strong in the third quarter and turnover of properties remains weak, by historic standards.”

More than a quarter of the houses surveyed sold at or below £100,000 (€118,031), with nearly two-thirds costing £150,000 (€175,616) or less. Belfast experienced one of the most dramatic slides, with prices falling by 21.7% over the year to £138,131 (€163,040). In affluent north Down, the average price of a home is now £179,263 (€211,548), down 11.7% over the year.

In terms of property type across the North, the price for apartments fell by 17% over the year to £119,716 (€141,271), for semi-detached houses it was down by 12.5% to £130,956 (€154,565), for detached houses by 7% to £252,581 (€298,117) and for terraced/town houses by 5.6% to £107,407 (€126,740). Semi-detached bungalows rose by 10.6% to £131,439 (€154,986) and detached bungalows increased by 4.2% to £195,636 (€230,720).

The Housing Executive’s head of research, Joe Frey, said the market downturn was not surprising, given the state of the North’s economy, but he added: “Affordability will remain a difficult issue for first-time buyers as long as banks and building societies continue to allocate mortgages on the basis of very restrictive lending criteria.”