The differential in house prices between Northern Ireland and the Republic will narrow further in the coming years, Bank of Ireland chief economist Dan McLaughlin has predicted.
Speaking in Newry today, Dr McLaughlin said: "Twenty-five years ago house prices were similar, but the differential widened massively from the mid 1990s and peaked at 90 per cent in favour of the Republic in 2003.
"Since then prices in Northern Ireland have risen faster closing the differential to 48 per cent in 2006 - £169,000 in Northern Ireland and £250,000 in the Republic," he noted.
But he predicted the differential would close further in 2007 and 2008, given the momentum in the Northern Ireland market and the prospect of only modest appreciation in the Republic where he said "affordability is dampening house price inflation - expected at 3 per cent this year and next" .
On exchange rates he said that sterling was very stable against the euro - sterling had effectively joined the single currency.
"Consequently, the volatility of the euro/dollar rate had now transferred to sterling/dollar," he said.
Alan Bridle, head of research services at Bank of Ireland Northern Ireland, warned the seminar that challenges facing incoming ministers in the restored Executive were "daunting", even though they would inherit an apparently healthy economy.
"On the face of it, the regional economy appears in rude health with sustained growth and record levels of employment in areas such as construction, retailing and business services - and the unprecedented boom in property prices," he said.
"But the challenge facing a restored Executive and Assembly is immense. We are over-reliant on public spending, have relatively low wages and are still strongly dependent on traditional sectors of industry", he said.