Tom McClelland, of the Royal Society of Chartered Surveyors, (RSCS) said the current difficulties were the fallout from a market which was driven by hungry investors.
Mr McClelland said house prices, which rose significantly between 2000 and 2005, should have "cooled in 2005".
"But what has happened is that there was even more of a surge in house prices ending up that between 2005 and 2007 house prices rose by 50% when other inflationary measures were only running at 3% a year, driven principally by investors and their belief that prices would only continue to rise," he said.
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He said fundamental measures such as the wage to house price ratio "got out of kilter" when interest rates rose and investors left the market: "There had to be an adjustment and we are going through that period now," he said.
"When it (the market) rises it tends to rise too far and when the pendulum swings too far up it has to swing back to correct and usually it over-corrects so we've been in correction mode for about a year," he said.
"The correction will be difficult but there was an unhealthy investment fever in property which was skewing the Northern Ireland economy."
Stating that the Province's social housing was limited and 'under pressure', Mr McClelland said 'new builds' were also falling in number and being sold at "big reductions to achieve sales".
He insisted: "It is believed that for the market to recover, house prices will have to return to levels last seen in late 2005 early 2006, so goodbye to our 50% price rise," he concluded.
Meanwhile, there's further evidence of a near-crisis in the housing market. Derek Alcorn, Chief executive of the Citizens Advice Bureau, said they had seen a rise in house repossession, and a "very clear" trend in all the banks "pulling up on their lending and tightening their credit".
(BMcC)
