House prices in the North 'may be levelling out'

The average house price has risen slightly in the North in a sign that the property market's steep decline may be levelling out, it emerged today.

But experts warned the market remained fragile with a relatively low number of properties being sold.

While house prices fell by up to 25% over the year, there were signs of an evening-off after the average figure rose by 2.1% in recent months.

The latest University of Ulster Quarterly House Price Index showed the average house price was £164,017 (€184,339) in the third quarter, a rise on the figure of £158,886 (€178,572) for the second quarter.

The report's authors said: "The recovery in the housing market is still piecemeal.

"Positive signs are the declining rates of annual price decrease across the different sectors of the market and an overall weighted increase over the last quarter of 2.1%.

"But sales transactions, at best, are only a third of the volume expected under normal conditions, suggesting that the market still has some distance to go."

The university research, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, is branded as the most authoritative.

The report compiled by Professor Alastair Adair, Professor Stanley McGreal, Louise Brown and David McIlhatton covers about 120 estate agents and records all open-market transactions.

This is the 100th Quarterly House Price Index to be published, after it was first launched by the university in 1984.

The average house price in the third quarter this year was £164,017 (€184,344) compared with £203,775 (€229,029) in 2008.

This represents an annual weighted decline of 19.2%. The annual rate at which house prices are falling is therefore continuing to slow down, from 29.5% in the second quarter this year and 35% in the first quarter.

According to the authors, the downward trend may have run its course and the market could be entering a phase characterised by small fluctuations in average price levels.

The survey also indicated improving levels of affordability. In total 20% of properties in the latest survey sold at or below £100,000 (€112,393). Nine out of ten houses sold at or below the £250,000 (€280,993) mark.