The volume of house sales in Northern Ireland in the third quarter of this year rose by more than 20% over the second quarter, according to the latest University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive.
The number of transactions recorded by the survey in July, August and September was 1,706 which was the largest sample size in this survey since the peak of the local housing market in the second quarter of 2007.
Although the overall average price of residential property in the third quarter, at £129,777, was broadly similar to the previous quarter, the report said the improving volume of sales offered considerable comfort that the housing market was in recovery.
When variations in the sample mix were allowed for, the overall average price of a house showed a weighted increase of 1.3% over the quarter but was down 4.8% over a year.
The authors of the report , Professor Alastair Adair, Dr John McCord, Professor Stanley McGreal and Dr David McIlhatton said: "The sharp quarterly rise in the number of transactions is a major step forward for the local housing market. Coupled with a weighted quarterly price increase of 1.3%, it presents an optimistic picture of future prospects.”
The report also said there was “a highly affordable price structure” in the Northern Ireland market. The proportion of properties in the survey selling at or below £100,000 rose in the third quarter to 44%. Overall, nearly three quarters of homes in the sample sold at or below £150,000.
“This should provide potential first-time buyers with confidence that there is a range of affordable housing in Northern Ireland. The price profile supports comments from the estate agency sector about the stabilisation of prices and growth in the number of transactions over the year,” the report added.
Alan Bridle, UK Economist at Bank of Ireland UK, said: “With house sellers adjusting their price expectations downwards, we are seeing houses selling again in greater numbers at these reduced prices, with the lower end of the market particularly active.
"The more favourable economic outlook, allied to UK government measures to stimulate the housing market, is likely to support greater activity into 2014. However, the conditions for a broader-based and more buoyant recovery in Northern Ireland are not yet in place.”
The Housing Executive’s Head of Research, Joe Frey, said: "The latest house price data confirms that the housing market is continuing along the path of stabilisation and recovery. The significant increase in turnover will offer a wider choice for homeowners and sound opportunities for investors.”
The report said that price trends were difficult to assess because of the considerable variability between property types. Over the year, the terraced/townhouse sector with an average price of £82,902 showed an increase of 3.9% and apartments at an average of £95,187 were up slightly by 0.3%.
In contrast the average price of semi-detached houses was down 3.6% over the year to £118,038 and semi-detached bungalows fell by 14.5% to £103,784 – the latter reflecting their small representation in the sample. The average price of detached bungalows dropped 4.4% to £141,164 and detached houses declined 9.3% to £219,493.
Regional performance (see table)
At regional level within Northern Ireland, price trends remain highly variable, often because of the limited sample size in previous surveys.
Lisburn remained the highest priced area in Northern Ireland with an average of £173,224 while North Belfast was the least expensive with an average of £85,756.
In Belfast the volume of sales at 537 was significantly up, indicating a more buoyant market, with South Belfast the highest priced market within the city. The overall average price in Belfast was £141,625, up 2.6%over the quarter but down by 5.7% over the year.
House Price Index
The long-term House Price Index, calculated relative to the base quarter for the survey in 1984, rose slightly to 473.51. The gap between the house price index and RPI remains at its lowest since the end of 2003.
Average house price by region Q3 2013
Northern Ireland - All
Mid and South Down