However, speaking in his capacity as the province's Royal Institution of Chartered Surveyors housing spokesperson he also said the organisation expected transaction numbers to increase during the first half of 2008 'following the recent interest rate cut' and with 'likely cuts in the coming months'.

Mr. McClelland's comments came after the Institution's housing market survey showed the overall cost of a house in Northern Ireland fell by as much as eight per cent in some areas during December.

Eighty two per cent of chartered surveyors contributing to the index recorded a price decline with just 18 per cent finding no change in the cost of a home.

Mr. McClelland said the price drop was recorded during a period when many potentional buyers had taken a "wait and see approach.

"It will be interesting to see whether the new year brings new cheer and if those buyers who were priced out of the market in 2007 and those buyers who held off making their purchase because of the uncertainty become active in the coming months," he added.

Ten per cent of survey respondents said house price drops in December were above eight per cent; 12 per cent recorded drops of between five and eight per cent; 30 per cent claimed to have experienced drops of between two and five per cent and 31 per cent said prices fell between nought and two per cent.

Ulster Bank's Head of Mortgages Derek Wilson said the end of the year was traditionally 'a slow period for the housing market' so price falls in December were "not unexpected.

"The market normally picks up in early spring, so the next few months will be important," he continued.

"The expectation is that first time buyers will become increasingly active now that asking prices are considered to be more realistic.

"And those who held off making their purchases because of falling prices will make a judgment in the early part of the year as to whether the time is then right to enter the market."