The University of Ulster Quarterly House Price Index, produced in partnership with the Bank of Ireland and the Northern Ireland Housing Executive has shown that house prices in Northern Ireland fell by 10.8% in the first three months of this year.

Prices showed a year-on-year drop of 35% in the first quarter of 2009, the University of Ulster survey found.

With an average of £157,000, prices are already back at the pre-property boom levels of early 2006, but experts said prices had not yet reached the bottom.

The volume of transactions remained low, with just 692 sales during January, February and March.

The decline in property values did slow from the 16.6% fall in the last three months of 2008, according to the University of Ulster Quarterly House Price Index, produced in partnership with the Bank of Ireland and the Northern Ireland Housing Executive.

A slight cause for optimism for the authors – Professors Alastair Adair and Stanley McGreal and Mrs Louise Brown – was that the high level of volatility in the housing market would decline rapidly over the course of the year as price levels begin to consolidate.

“The downward correction in the market is likely to be as dramatic as the steep increase in 2006 and the start of 2007 – we expect the trend in the price index will flatten out by the end of the year,” they wrote.

Economist Alan Bridle, Bank of Ireland head of research in Northern Ireland, said prices had fallen by almost 40% from their peak.

“It is unlikely we have yet reached the absolute trough in the price cycle, with the notable exception of the new-build segment, but the survey shows the restoration of affordable housing in Northern Ireland is well advanced,” he said.

The Housing Executive’s Head of Research, Joe Frey, said their latest affordability index confirmed the significant improvement in the ratio of incomes to house prices. 

Source-www.bbcnews.co.uk