House prices in Northern Ireland have experienced their strongest annual rate of growth in more than seven years, new official figures have revealed.
A surge of 14.2% in February means the average local property is now priced at £152,000, according to the Government’s Office for National Statistics (ONS).
But despite the soaring growth – which is almost double the UK’s 7.2% hike – prices here remain 43% below their 2007 peak.
Richard McCullough from Stanley Best Estate Agents, which has branches in Belfast, Cookstown and Magherafelt, said he had noticed an increase in activity in the local property market recently.
“In January and February we had our busiest months since 2007, so demand is growing,” he said.
“The problem we have at the minute is a lack of supply which leads to people overpaying for properties, or panic-paying, just as they did in 2007.
“However, I believe this will soon rectify itself because, obviously, banks won’t underpin lending to those levels again.”
Mr McCullough also said he expected a normalisation of the market across Northern Ireland by next year.
“February’s 14.2% growth level is a blip,” he said.
“Northern Ireland is now out of the terrible period where house prices were crashing and there has been a bit of over-confidence again in the market, which explains that figure.
“I can see this year being an anomaly and next year we will start to see a more normalised market.”
Across the UK, house prices went up by 0.6% month-on-month in February, but the year-on-year rise is slowing down. The ONS report said: “Annual house price growth is showing signs of slowing across the majority of the UK.”
In Northern Ireland prices surged by 14.2% in February, marking the strongest annual rate of growth since November 2007.
Danske Bank Chief Economist Angela McGowan said the property market is now moving towards a better equilibrium.
“Double-digit growth rates are not expected in the years ahead,” she said.
“Danske Bank forecasts suggest a much more sustainable house price journey for our economy.
“We forecast prices to rise by just under 6% this year before moving to an average growth rate of around 3% per year between 2016 and 2020.”
House prices in England -where the average is £280,000 – are below the levels seen last August but are still 12.7% higher than their 2008 peak levels.
Annual price growth in England has been driven by the east and London, the ONS said.
The average property value in the east of England is now £288,000 and the typical London house price is £490,000.
At £152,000 on average, local house prices – which fell particularly sharply following the financial downturn – are still around 43% below their 2007 peak. Across England, prices have increased by 7.4% over the last year to reach £280,000. Average prices in Scotland increased by 6.4% and now stand at £194,000. Property values in Wales increased by 1.1% year on year to reach £170,000 on average.
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Caption: House prices in Northern Ireland have experienced their strongest annual rate of growth in more than seven years, new official figures have revealed