North's house prices plummet over 34%

HOUSE PRICES plummeted by more than 34 per cent in Northern Ireland last year as homeowners in the North suffered the biggest fall in property values across the UK.

The Nationwide Building Society said its latest industry research showed the North had witnessed the biggest annual fall in house prices in 56 years.

House prices fell generally in the UK by 15.9 per cent last year but in Northern Ireland prices fell by more than a third in 2008.

Nationwide said the average price of a house fell in the North by 34.2 per cent to £147,833 (€163,426) – compared to a UK average for 2008 of £153,048.

Belfast also topped Nationwide’s poll of UK cities which recorded the biggest drops in house prices as property values in the city slumped by 33 per cent.

Commenting on the figures, Fionnuala Earley, Nationwide’s chief economist, said: “2008 has been a year of turmoil in the UK housing market . . . This time last year we expected the housing market . . . to weaken, but we did not anticipate the speed of house price falls . . . and domestic economic slowdown.”

Ms Earley said the decline in house prices had been driven by three key factors: credit conditions, expectations and affordability.

Nationwide said the dramatic fall in house prices in the North had to be seen in the context of “enormous rates of growth” in 2006 and 2007.

The UK’s largest building society pointed to the fact that in the first quarter of 2007 house prices in the North were growing at an annual rate of 57.6 per cent. But by the fourth quarter of 2008 prices in the North had fallen by a seasonally adjusted 7.4 per cent.

This article appears in the print edition of the Irish Times