Homes market on the rise, but demand outstrips supply
Confidence in the Northern Ireland housing market is now the highest in the UK, as prices shot up for 21st month in a row.
However, more houses need to be built as demand for new homes is far exceeding supply, according to the latest Royal Institution of Chartered Surveyors (RICS) report.
The average house price in Northern Ireland is now £142,000, according to the latest figures from the Office for National Statistics (ONS). While this is a steady increase in the market, prices are still around 45% below their 2007 peak.
The price of homes is beginning to climb as less properties are coming on to the market, due to amount of homeowners stuck in negative equity, and the lack of building taking place, the RICS and Ulster Bank Residential Market Survey said.
Demand for homes is increasing as well -with more confidence in the market - and last year the largest number of first-time buyers got on to the property ladder since 2006.
A net balance of 65% of surveyors said prices rose in the past three months, with a net balance 43% saying they will continue to rise in the next three months.
RICS Northern Ireland spokesman Samuel Dickey said: "With new buyer enquiries continuing to rise at a faster rate than new vendor instructions, this is creating upward pressure on prices.
"Indeed, the gap between demand and supply appears to be widening as more potential buyers have been coming into the market after Christmas."
Supply will improve when building increases in around 12 months time, Mr Dickey said.
"This will likely rebalance at least to some extent as we move into the spring, when more properties tend to come onto the market. This should also lead to an increase in transactions."
Prices in the province are expected to rise by around 4% this year, RICS predicted.
Last year homeowners borrowed 13,000 loans - an increase of 30% in 2013.
These mortgages totalled £1.3bn - up 40% - on the previous year, figures from the Council of Mortgage Lenders (CML) showed.
The province's housing market bottomed out in September 2013, with the average price at £127,000, after plummeting 54% from its peak in the third quarter of 2007 at around £250,000.
Simon Brien, from Simon Brien Residential, said in the Northern Ireland property market "there is a lot of competition due to renewed confidence and a lack of supply."
He said confidence has returned to the market as people have realised prices won't fall any further, along with improving mortgage deals.
"It was only really in the second half of 2014 people knew the market had bottomed out. Through the early part of last year, people thought interest rates would rise and the fixed rate deals would go, now we know the interest rates won't rise and there are more lenders offering better mortgage deals."
Between the years 2005 and 2007 the average house price in Northern Ireland doubled, with prices peaking at almost £250,000. Since the market bottomed out with the average price at £127,000, it has steadily been on the increase, as consumer confidence returned and mortgage lending rates fell. While prices rose 6% last year, they are still around 45% lower than 2007.