Posted on Wednesday 18 February 2015 by Ulster Business

House prices up eight percent but still only half of peak

The average price of a house in Northern Ireland has climbed 8% over the last year, with terraces leading the charge higher, new government data has revealed.

The jump puts the average house price here at £109,342, according to the latest Residential Property Price Index released by the Department of Finance, a record of actual sales of residential property and one of the most accurate indicators of the health of the market.

But while the prices are on the rise, there’s still a long way to go before the market has recovered the ground lost since the start of the credit crunch and subsequent recession in 2007.

Average house prices in Northern Ireland are still down 51% since the peak but are buoyed by the fact the ratio between prices and wages and come back to more normal levels.

The ratio of average house price to average earnings now stands at 4.5, slightly higher than the last two years at 4.2% but much more sustainable than the 9.1% reached in 2007.

When it comes to house types, terraces enjoyed the biggest boost to prices during 2014 of 9% to stand at £74,185, followed closely by semi-detached houses which climbed 8% to £108,212. Detached houses and apartments both rose 7% over the year to £167,906 and £86,871 respectively.

A look at transaction data also shows a boost to the property market here, although apartments are still lagging other property types, Richard Ramsey, economist at Ulster Bank pointed out.

“When you look at actual transactions, 2014 has proven to be the best year for all property types, apart from the apartment market which suggests they remain out of favour for now.”

From a geography perspective, the west and south of Northern Ireland performed best over the last year with average house prices climbing 10% to £103,282 while those in the north of Northern Ireland climbed 9% to £101,839, in Belfast by 9% to £102,234, in outer Belfast by 9% to £125,884 and in the east of Northern Ireland by the lowest rate of 5% to £105,331.

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