HOUSE prices in Northern Ireland rose by 10 per cent in the past year, according to official statistics.
The increase over the 12 months to the end of June marks the strongest annual performance of the housing market since immediately before the crash in 2007.
It makes the average cost of a new home in the north £120,497 placing the market at around early 2005 levels. The number of transactions is also on the rise with 4,800 properties sold during the second quarter - up by 25 per cent compared to the same period in 2013.
The figures are included in the latest Residential Property Price Index (RPPI) produced by the Northern Ireland Statistics and Research Agency (Nisra).
As it uses data from sales recorded by Land and Property Services, it is considered the most comprehensive barometer of the state of the north's housing market.
Finance minister Simon Hamilton said the statistics provide "evidence of buyers' growing confidence in the market".
The number of houses sold during the three months was the highest recorded for a second quarter since 2007. Terraced properties experienced the greatest price increase over the year, up by 12 per cent to cost £71,872 typically.
The cost of semi-detached homes rose by 9 per cent to £104,927 while a typical apartment set back buyers £83,987.
Prices for detached properties meanwhile rose around 4 per cent over the 12 months to £162,426.
The report showed the house price recovery was not confined to Belfast.
Prices rose by around 10 per cent in the city only being outperformed by the outskirts of Belfast where the typical cost increased by 12 per cent.
The cost of a new home in the east of Northern Ireland rose 9 per cent, followed by the west and south (7 per cent) and the north (5 per cent).
Mr Hamilton said: "Residential property prices have increased by 4 per cent from the previous quarter. This steady upward trend is a further indication that the property market here is stabilising. Notably, the report shows that the increase applies in both urban and rural areas.
This positive change tells us that the market right across Northern Ireland is continuing to show signs of recovery," he said.
Mr Hamilton said the report "shows further encouraging signs that the housing market in NI is a much more normalised picture. This is particularly good news for first time purchasers and those who are seeking to move up and secure value for money in a much more stable market."
Ulster Bank's chief economist in Northern Ireland Richard Ramsey said the report was "the most encouraging report on the state of Northern Ireland housing market since before the property downturn began", however he said it was "important to put this double-digit increase into perspective". "To date, Northern Ireland has recouped just one tenth of the overall decline in house prices that occurred since the peak seven years ago. From a wider economic perspective, the continued rise in transactions is a more significant signal that the recovery is strengthening," he said.