Knight Frank also suggested the Ulster property market was only half way through a period of correction, predicting values could taper off by a further 15%.
The estate agent predicted prices would re-emerge at the September 2003 level, which would knock 30% off average prices in 2007.
However, bottom of the market prices will not be seen until late next year, or early 2010, according to the group.
Knight Frank said it still expects house sales to rise next year.
Sales volumes are predicted to hit their lowest point at the end of this year, but should recoup to 60% of average levels by mid-2009, according to the estate agent.
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The group's Head of Residential Research, Liam Bailey, said: "Our forecast suggests we will be closing in on the bottom of the market in late 2009/early 2010.
"Our forecast also suggests we are now half way through the process of price falls, with around 15% of an estimated 30% peak-to-trough decline already factored into prices."
According to some commentators, regional prices in certain areas of Northern Ireland have already plummeted by around 50% - suggesting a gap for equity rich investors and speculators to re-enter the market.
Many are maintaining a close eye on falling prices, but few are taking risks amid fears values will drop further, as well as the backdrop of global economic turmoil.
The residential market is usually first to fall into the hands of investors when price 'hit the floor'.
In spite of this, a complete levelling out, or correction, of the market is not predicted by Knight Frank until at least 2015, with others suggesting 2019 before the ripples of recovery are felt in Northern Ireland.
The group said its assumptions were based on the notion mortgage providers would continue to take a conservative approach to lending, as the credit crunch continues to take its grip.
(PR/JM)
