House price rise for 2016 expected to be moderate 5%
Northern Ireland house prices will rise moderately in 2016, industry experts have said.
The latest Residential Market Survey from Ulster Bank and the Royal Institution of Chartered Surveyors (RICS) also predicts strong sales growth in the coming three months.
However, surveyors also reported a fall in the number of new houses coming on to the market for a second time in three months.
At the same time, they said new buyer enquiries increased in January, albeit modestly, for the 47th month in a row.
RICS Northern Ireland residential property spokesman Samuel Dickey said an imbalance between supply and demand was pushing up prices.
"Supply remains the key issue in the market, particularly in the greater Belfast area," he added.
"Demand has been increasing, and good quality homes in good areas are very much strongly sought after, leading to bidding for properties.
"The reasonably strong economic data for Northern Ireland at the beginning of this year would suggest that the conditions are there for demand to continue rising.
"However, as we move into the traditionally busy time of the year, more properties should come on to the market as well, which should help alleviate the supply issue."
A net balance of 58% of surveyors reported an increase in prices in January, compared with 32% the previous month.
Meanwhile, a net balance of 30% also expect prices to rise over the next three months. Over the course of 2016, the RICS expects Northern Ireland house prices to rise by 5%.
Surveyors also indicated an increase in sales in January and said they expected the volume of sales to rise in the next three months.
Sean Murphy, regional managing director of branch and private banking at Ulster Bank, said the survey chimed with other economic indicators showing business activity rising in January.
"It also correlates with our own mortgage data which was strong in January, and which we expect to increase further as we move into the traditionally busy period for the housing market," he added.
In relation to the UK market, new buyer enquiries rose for the tenth month in a row in January, with the pace of growth in enquiries accelerating for a second consecutive report.
Survey feedback continued to suggest that the recent significant increase in demand is due to a rush of buy-to-let investors hoping to buy before the 3% Stamp Duty surcharge comes into effect in April.
Critically, 74% of respondents expect an increase of purchases by buy-to-let investors prior to the changes.