AVERAGE house prices in Northern Ireland have risen by 12.5 per cent over the last year to £185,505, according to the latest property index from Halifax.
In the UK as a whole, the average price increased by 0.4 per cent month on month in August to hit a new record high, offsetting a 0.1 per cent dip in July, the index said.
But the report warned that "a more challenging period for house prices should be expected".
It comes as a separate report from the Royal Institution of Chartered Surveyors (Rics) shows that home-buyer inquiries fell in Northern Ireland in August at the steepest rate since the early stages of the coronavirus pandemic as the cost-of-living crisis and wider economic challenges affected market conditions.
The surveyors' monthly barometer, produced locally in association with Ulster Bank, showed a net balance of 20 per cent of property professionals reported a fall rather than a rise in new buyer inquiries in August, marking the sharpest downturn since April 2020.
New buyer inquiries in the north fell for the second month in a row and sat at their weakest since May 2020.
House sales were also down in August, with the latest feedback implying this downward trend is becoming further entrenched, Rics said.
In terms of supply, Northern Ireland respondents indicated that there was a marginal increase in homes coming on to the market in August from low levels in July. But anecdotally, surveyors continue to report significant shortages of available properties.
This lack of supply has been a crucial factor in underpinning growth in house prices, with more than four in five (82 per cent) of Northern Ireland respondents reporting an increase in house prices during August.
Looking ahead, 79 per cent of respondents expects prices to be higher in a year’s time - the highest reading across all the UK regions.
Samuel Dickey, Rics' Northern Ireland residential property spokesman, says: “Northern Ireland is seeing some scaling back of enquiries and demand from extremely high levels earlier in the year, which was very much expected.
“But whilst lower than it was, demand is still outstripping supply. We continue to see properties selling, and asking prices being met and sometimes exceeded.
“We are likely to see this lack of supply to be a significant factor in the market for the foreseeable and explains why surveyors expect price growth over the coming 12 months.”
Terry Robb, head of personal banking at Ulster Bank, added: “Mortgage demand has been very good this year to date, and our expectation is that there will continue to be good demand from local home-buyers.
“With regard to existing mortgage customers, we continue to see a strong demand for fixed rate mortgages as more and more customers are looking for certainty at this time.”
