Improvements in the Northern Ireland housing market suggest a "tentative" recovery, according to a report from the University of Ulster.

The latest University of Ulster Quarterly House Price Index for the first quarter of 2013 covered 1,407 open market transactions from a network of estate agents, up more than 50% on the same period in 2012.

A higher proportion of sales of lower priced properties has seen the average price of a property down to £131,128.

But taking account of the mix of housing types covered in the survey, the report recorded a weighted increase in house prices of 1.9% over a year.

The report’s authors, Professor Alastair Adair, Professor Stanley McGreal, Dr David McIlhatton and Dr John McCord, said: "The first quarter survey provides further support to the argument that the housing market is showing tentative signs of recovery, with the volume of transactions up again this quarter and with a weighted rate of increase of 1.9% in the aggregate market compared to the same quarter in 2012.

"However, it is also apparent that the first three months of the year were difficult in many segments of the housing market because of factors such as the weather."

There was an increase in the percentage of properties with lower price bands.

Nearly three quarters sold at or below £150,000, with 45% of the total going at or below £100,000.

30% of sales in the survey were terrace/townhouses, while the representation of semi-detached homes was also higher at 28%.

Alan Bridle, UK Economist at Bank of Ireland UK, said: "Higher demand from both first time buyers at the new price points coupled with investors attracted by rental yields on some properties are reported as key drivers of increased activity, particularly in the Belfast market. 

"Some modest loosening in the mortgage market, partly as a result of the UK Funding for Lending Scheme, and a perception that prices may have bottomed in the more urban locations may also be positive influences. Seasonal trends should be supportive of higher sales volumes over the next few months."

The Housing Executive’s Head of Research, Joe Frey, said: "Further signs of a stabilising housing market are to be welcomed, but economic fundamentals in Northern Ireland remain weak, suggesting that any upturn in the market is some way off."

(IT/CD)