Open for Business/Northern Ireland:What do you get when you add five interest rate hikes in less than 12 months and a near 50 per cent rise in house prices in roughly the same period? Answer: the Northern Ireland housing market.

A market which in the last year has defied the critics, stunned the analysts and left house sellers with more cash in their pocket than they once - not so long ago - could only ever have dreamed about.

In the early 1990s before the IRA ceasefire the average house in Northern Ireland cost below £50,000.

Today the average house price in Northern Ireland has risen to more than £200,000, according to research published last month by the University of Ulster.

The University of Ulster Quarterly House Price Index, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, showed house prices rose on average by 46 per cent last year.

New figures released earlier this week by the mortgage lender Halifax confirmed that house prices in Northern Ireland rose by nearly 50 per cent in the last 12 months.

The report comes as other evidence suggests that house prices in the North are now beginning to level from the highs that they reached last year.

According to Halifax the price of property in the North saw a major rise in the second quarter of 2007 - by its estimates the average price of a property in Northern Ireland now stands at £228,790.

It is currently the third most expensive region in the United Kingdom, sitting just behind London and the south east of England when it comes to property prices.

Halifax attributes this to a number of factors including a strong local economy, a high level of activity by investors and the increase in the number of people purchasing a second house - for a variety of reasons.

But the undeniable underlying factor in the recent boom in house prices in the North comes down to just one thing, according to one of the authors of the University of Ulster research.

Professor Stanley McGreal from the University of Ulster believes the peace process has been the major force behind the impressive rise in house prices across the North.

Professor McGreal says the UU's research shows prices have increased every quarter since 1995.

He is one of the authors of the University of Ulster Quarterly House Price Index who just last month said there was no sign of the market slowing up despite recent interest rate rises.

Although they also pointed out that there can be a delay in how quickly such changes impact on the market.

The house price index showed a strong rise in prices across all property types, with the best performances coming from semi- detached houses and bungalows - which rose by almost 53 per cent and 51 per cent to new average prices of £213,386 and £199,397.

In Belfast the overall average price of a house was £207,543, an increase of 43.1 per cent over the year, while some areas in mid-Ulster such as Moneymore have seen major growth of nearly 50 per cent to £244,293.

But the impression that the housing market is beginning to cool in the North is supported by the latest research from the Royal Institution of Chartered Surveyors.

Tom McClelland, who has been in the business of selling houses for more than 35 years, says there is a clear trend that the market is slowing down.

McClelland, who is also the institution's Northern Ireland residential property spokesman, believes that interest rate hikes will cool it further.

He says the North was playing catch-up with the rest of the UK when it came to property prices and he believes the restoration of the Assembly will boost confidence in the North as a location to live and invest in.

"The rate of house price growth in Northern Ireland is still very strong. In the last 12 months house prices here have outperformed every region in Europe and there were a number of clear reasons for that. We have a very sluggish planning system here, we had traditionally low interest rates, we had a growth in population and we had a public spending boom.

"Now the boom in house prices cannot be maintained on the back of a public sector economy, so it was going to slow.

"There are certain factors such as how the economy will perform in the future and whether it will become more enterprise-driven as to how house prices will perform in the future."

It is not just the residential housing market which is causing concern among property agents. When it comes to the commercial property scene, some say it is anything but buoyant.

The latest research from the surveyors' institution shows commercial property rents lag far behind comparative rates achieved for similar properties in either the United Kingdom or the Republic.

Chris Callan, the institution's Northern Ireland commercial property spokesman, says the latest interest rate hike will have a negative impact.

"There are certain areas which do really well and certainly continue to outperform - for example Donegall Place outperforms Bond Street when it comes to retail.

"But commercial property in Northern Ireland is quite localised - in the provincial centres it is very retail driven. There are very few office developments outside the likes of Belfast and Derry, so there is a lot of potential in Northern Ireland, but it will depend on how the economy performs."