A new trend of people moving back into the city centres to be close to their places of work and leisure will create a need for at least 2,000 new housing units in Belfast's inner city over the next 10 years, according to the Northern Ireland Office's Regional Development Strategy. The growing demand for innercity, high quality apartments is due to the improved security situation and an increase in the number of professionals, both singles and couples, says Dennis Miles, from Miles & Danker Estate Agents and Chartered Accountants.

"While years ago, people would have preferred houses in traditional suburban locations, we are now witnessing an increasing Europeanisation in Northern Ireland, whereby people's main concerns are to avoid traffic jams and parking problems by living as close as possible to their places of work and entertainment."

However, Thomas O'Doherty, of the Belfast office of agents Hooke & McDonald's, believes the 2,000 figure is an "underestimate". "I would foresee a need for 2,000 city-centre apartments within a five- rather than a 10year-period."

Hooke & McDonald has been involved in several residential developments at Laganside, Belfast's regenerated waterfront, and is currently selling the last few units at its St John's Wharf development at May's Meadow, built in co-operation with Wexford-based WN Developments Ltd. Of the 68 apartments launched two weeks ago, only two 560 sq ft one-bedroom apartments at £88,000 sterling and several three-bedroom apartments, ranging in size from 1,250 to 1,510 sq ft, with prices from £170,000 to £199,000, remain.

While Mr O'Doherty predicts a long-term capital appreciation at Laganside of around 10 per cent, short term yields of 15 per cent are nothing unusual. Two-bedroom apartments at St George's Harbour, next door to St John's Wharf, sold for around £110,000 two years ago. Some of them are currently on the market again at between £140,000 and £150,000.

Belfast's renting market is still in its infancy, although there is a growing trend of people buying apartments to sublet them, says Mr O'Doherty.

"So far the main renting location has been around Queen's University - Botanic, the Lisburn Road and Holyland areas. We are now witnessing a new trend of business people from the Republic, who need a permanent base in Belfast, renting high-quality apartments such as those at Laganside. We have also seen an increase in corporate tenants."

One-bedroom apartments at Laganside currently fetch between £400 and £500 a month, two-bedroom units between £450 and £600. Not all tenants are high-income professionals, though, as the planning director of Laganside Corporation, Mr Kyle Alexander, points out: "We are happy to have achieved a mixed tenure by committing around 25 per cent of all residential units to social housing."

Almost 400 residential units have been created at Laganside over the past six years, the main developments being at Clarendon Dock, Mays's Meadow and Gregg's Quay. Several hundred more units are planned, mainly at the east Bank.

In the short term, the main development there will be the 16-acre Howden Sirocco site, almost 1,000 ft of it directly on the waterfront, which was bought last year by Dunloe-Ewart for £23 million. While the company remains tight-lipped over its plans for the site, it is expected to create a mixed-use development containing retail, leisure and residential units.

The British government's strict guidelines regarding greenfield sites have led developers to look at existing property for renovation and regeneration. The main focus in this respect will be the Cathedral Quarter, an old part of Belfast which is part of the wider Laganside area.

The Laganside Corporation has already bought property in the area to provide for community groups and arts-cultural tenants at affordable rents.

Commercial tenants at Laganside - BT, Abbey National, Prudential, Tesco, Telecom Eireann and Phoenix Natural Gas to name but a few - have so far generated 4,000 new jobs, with the Halifax's new call-centre at the Gasworks site to create another 1,500 over the next two years. The £110 million Odyssey entertainment complex on the east bank is due to open this November, generating another 600 jobs.