As a result, when inflation is accounted, for "real" house prices will have dropped to 2003 levels by 2015.
NIESR’s figures show average house prices will rise from £194,235 last year to £213,091 in 2015.
But to keep pace with inflation they would need reach £231,000.
The resulting "real" shortfall will leave average households £28,000 out of pocket.
NIESR research fellow Simon Kirby said: "While we have assumed the housing market remains stable, house prices could decline at a more rapid pace."
In a further economic blow, NIESR also warned a double-dip recession was more likely after the Coalition’s Emergency Budget.
Kirby said: "The Budget will inevitably reduce growth. The major impact will be in 2011, when we believe it will shave 0.4 percentage points off GDP."
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