House prices in the North have recovered following a slowdown at the turn of the year.

An 11.57 per cent increase over the past year means that the average house price is now £86,705 sterling, according to the latest report published by the University of Ulster.

In contrast to Dublin the rise has been fuelled by activity at the upper end of the market, while with a growth rate of just 2.2 per cent, the apartment sector has experienced a considerable slowdown - in 2000 apartment prices rose by over 18 per cent .

In the second quarter of 2001 the average prices were by sector: £134,039 for detached houses; £111,126 for detached bungalows; £83,804 for apartments; £79,953 for semi-detached houses and £59,895 for terraced houses.

While prices declined by an average of 5.39 per cent in the first quarter of 2001, the second quarter has seen an increase of 5.41 per cent.

One of the authors of the report, Professor Alastair Adair, expressed relief that last year's record 20 per cent growth rate had not been sustained. He attributed the slowdown in part to the disenchantment of Dublin investors.

"There is a sneaking suspicion that some of the house price increase in Northern Ireland has been fuelled by people who have made paper profits in Dublin wanting to repeat the exercise by investing in property in Belfast. I don't think there is the same level of investment market in Belfast as there is in Dublin," he said.

"I don't think they have lost their money - 11 per cent growth is a good investment return - but you are not getting spectacular rates of growth.

Professor Adair said there simply was not the same market for rented accommodation in Belfast as in Dublin. "Undoubtedly, there will be areas where the average price of apartments will probably stay flat and may even decline. But high-quality schemes in good locations will continue to do well," he said.

Growth at the upper end of the market was likely to continue, Professor Adair said.

"The sectors within housing markets move in kinds of waves. This time last year it was apartments that were in the ascendancy and the detached houses were moving very modestly. Now demand is shifting towards the upper end. And developers are now turning their attention to the upper end as well."

Professor Adair did not think the market had yet reached its peak. "Markets react to two types of influences, internal and external," he said.

"The biggest external influences are the interest rate and inflation. For the moment we have a low interest rate and a low inflation environment, so economic confidence in Northern Ireland is fairly good. There are not the external influences that would point to a decline in the market.

"With regard to the internal dynamics of the market itself, the long-term average growth trend has been 8 to 9 per cent. I think the market will still continue to grow before it gets below the 7 to 8 per cent mark."