Shackles come off Northern Ireland's sluggish property market as fresh surge in demand pushes house prices up 11%
Confidence is returning to house sales here as buyers embrace the growth of Northern Ireland's reviving market.
Prices have increased by nearly 11% in Northern Ireland over the last year - but remain far below their peak in 2007.
A house here would set a buyer back an average of £143,000, which is 45% below the pre-financial crisis high, the Office for National Statistics has revealed.
Prices across the UK as a whole leapt by 12.1% in the 12 months to September, marking the fastest annual growth seen since July 2007.
The sustained price increase that Northern Ireland has seen in the last year is attributed to the depth of the region's property market collapse in 2007.
"I suspect we are just playing catch-up," said Professor Paddy Gray, Professor of Housing at University of Ulster, who predicted that prices had now "bottomed out".
"A lot of people were in a situation where they were afraid to buy because prices were falling," he added.
"Maybe people are now seeing prices beginning to rise and want to get in there, fearing that the same thing will happen again - which it won't.
"You may well have pent-up demand; people living in overcrowded or unsatisfactory conditions who now feel the time is right."
House prices in Northern Ireland rose more rapidly during 2005-7 and then collapsed further than in other parts of the UK during the financial crisis.
"Compared to the rest of the UK, our drop was dramatic," commented Patrick Palmer, a partner at Templeton Robinson estate agents.
"10.9% is a big lift in the last 12 months, but you have to remember where Northern Ireland comes from compared to the rest of the UK. It is not surprising we have increased more than other areas."
Estate agents have seen an increase in demand for houses across the price spectrum and a lack of supply, thus spurring price increases.
They expect the market to stabilise over the next year as more houses and newbuild developments come onto the market.
Simon Brien, partner at Simon Brien Residential estate agents, said: "Confidence has grown month-on-month this year."
"I think you'll see Northern Ireland's markets steadily going back to the way they operated 10 years ago, with a sustainable growth of 3-5% per annum."
Property prices here showing greatest market demand are in Greater Belfast, including Malone and Holywood, and within a half-hour travel radius of the city, according to Mr Brien.
"There is still going to be positive growth next year," he said. "But I wouldn't want to see another 10.9% growth - things can get overheated too quickly." He estimated that prices had recovered in east and south Belfast and South Down to hover at approximately 35-40% below their peak, while areas of Mid-Ulster and the west remain at around 45-50% below their peak.
Kirby O'Connor, managing director of GOC Estate Agents, said: "Inner Belfast is the strongest market but hopefully that will sweep out into rural areas."
Estate agents hope Northern Ireland's housing market will return to steady, sustainable growth. First-time buyers are having to pay 13.3% more to get on the property ladder than they did a year ago, but they are not being put off.
Northern Ireland's 10.9% increase in prices is nearly double the 5.8% growth of Wales and 7.6% of Scotland in the year to September 2014. However, the average house price of £143,000 is still the lowest in the UK so the increase is not deterring potential buyers. Houses are selling for nearly £30,000 less than in Wales and are more than £50,000 cheaper than Scotland's average of £197,000, the annual house price survey showed. The average cost of a house across the whole of the UK is £273,000.
Kirsty’s four-month search to find the house she wanted
First-time buyer and estate agent Kirsty Finney (26) will be signing the contract for her new house in Belfast this week.
It took her four months to find the three-bedroom terraced house. She had looked at a dozen places before having her offer accepted on the property in Clarawood Park, east Belfast.
Competition from other buyers was pushing properties out of her price bracket.
“The houses were always going over the asking price and then went out of my price range,” she said. “I think it was just the demand for that price level. I looked at anything from £45-65,000.”
She spent three years saving to buy a property and anticipates spending up to £8,000 on decorating the house before renting it out. “I bought it as an investment,” she said. “It needs a lot of work.”
Kirsty grew up in east Belfast and wanted to stay in the area.
“I knew the rental market would be quite strong there,” she said.
Her experience as an estate agent with GOC Estate, meant she enjoyed the experience of looking for and buying her first house.
“It wasn’t stressful at all. I quite enjoyed it. The timing was right, the house came up and I had the money there.
“I didn’t have a plan that I wanted to buy a house by this age and have it rented out.”
Three weeks after seeing the house, her offer was accepted and she looks forward to signing the contract this week.
“I think I am one of the lucky ones — I just found a house, made an offer and it was accepted quickly, so I don’t think I have over-paid at all.”