NI housing market: RICS forecasts prices could rise 4% during 2015

House prices in Northern Ireland have been rising but are still more than 40% below what they were at the peak of the property boom in 2007

Northern Ireland house prices could increase by 4% next year, according to a forecast by the Royal Institution of Chartered Surveyors (RICS).

The predicted rise is above the UK average, which is expected to see an increase of 3% over the course of 2015.

It is also higher than most other UK regions, including London.

Northern Ireland's Residential Property Price Index (RPPI) rose 7% this year, but house prices are still more than 40% below the peak of the boom.

Recovery

Seven years ago, as the global economic downturn took hold, Northern Ireland suffered one of the most severe property crashes in economic history.

Prices fell more than 50% below their peak in late 2007.

However, the market began to show signs of recovery in the latter half of 2013.

RICS has now predicted that next year, UK house prices will be bolstered by "recent changes to stamp duty, continuing demand and lack of supply of property".

Its residential spokesman in Northern Ireland, Samuel Dickey, said 2014 had seen "stronger house price growth in Northern Ireland than RICS anticipated".

He said said this was "largely due to a stronger economic recovery than expected".

'Spending cuts'

"In the local market, there is still an issue with supply, whilst buyer demand remains strong. This is creating the conditions for continuing price growth.

"However, with public spending cuts likely to act as a drag on the economy, we expect price growth to be more modest in 2015 than it has proved to be in 2014."

Mr Dickey said house sales in Northern Ireland were still at very low levels "relative to their pre-crises peak".

But he added that sales were currently increasing and his organisation expected that to continue into next year.

"The stamp duty reforms announced in the Autumn Statement, which will benefit the majority of homebuyers, will help," he said.

The institution's forecast examines all parts of the housing market, including prices, sales, rental incomes to construction and repossession levels.