First Active identifies 44% rise in Dublin house prices

House prices in Dublin and surrounding counties increased by just over 44 per cent in 1998, almost three times the rate of increase in the rest of the Republic, First Active said yesterday.

Estate agents described the figure as "very bullish" and said their figures were lower. However, Sherry FitzGerald, which specialises in the Dublin region, said it had recorded a 37 per cent increase in Dublin prices in 1998.

First Active said its mix-adjusted house price index showed a national increase of 27.8 per cent in 1998, a two percentage point drop on the figure for 1997. Price increases outside Dublin and the surrounding counties (Wicklow, Kildare, Meath and Louth) averaged 14.7 per cent in 1998.

The difference between Dublin and surrounding counties, and the rest of the Republic, contrasted with 1997, when the figures for both regions were broadly the same, First Active said.

The bank's research also found house prices in Dublin and surrounding counties increased by 10 per cent in the final quarter of last year, compared with an increase of 3.2 per cent for the rest of the Republic. Prices for existing three-bedroom houses across the State increased most rapidly in price (23 per cent) in the final quarter, while new four-bedroom houses experienced a decline in price of 2.2 per cent.

In the year overall, new three-bedroom houses increased in price by an average of 33 per cent, while existing three-bedroom houses increased by 26 per cent. New four-bedroom houses increased by 35 per cent, while existing four-bedroom houses increased by 15 per cent.

Apartment prices increased by 28.9 per cent across the State during the year, though they remained virtually unchanged during the final quarter. A regional breakdown was not available. "Residential investment properties experienced a levelling-off in prices in mid-1998, but rose by 13.6 per cent in the final quarter and by 18.4 per cent for the year," the bank said.

Mr Frank Doonan, residential director with Gunne estate agents, said the 44 per cent figure for Dublin and surrounding counties was "very bullish". He said his company had monitored significant price increases, of the order of 40 per cent, for areas like Drogheda, Navan and Naas, "but when you put it in the pot with the figure from Dublin, that would have brought it back".

Gunne's estimates for Dublin for 1998 are a 29 per cent increase for existing houses and a 23 per cent increase for new houses. The equivalent figures for the State as a whole are 20 per cent and 18 per cent. The estate agent registered a 40 per cent increase for houses in Drogheda "in the middle to upper end" of the market, Mr Doonan said.

The relative value of properties in towns such as Drogheda had attracted buyers because of the high prices in Dublin, but the total value of the properties sold would not "pull up" the Dublin figures significantly, he said.

Mr Simon Ensor, residential director with Sherry FitzGerald, which currently concentrates on the Dublin region, said the overall figure produced by First Active "would be pretty much in line with what we would have anticipated". However, the Dublin region figure was a lot stronger than that produced by Sherry FitzGerald.

"Our figure for the region is 37 per cent, which, on its own, is extremely strong," Mr Ensor said. A lot of that growth occurred in the earlier part of the year, before the publication of the Bacon report, he said. The 37 per cent figure was for houses and apartments of all sizes.

The latest figures for Dublin available from the Department of the Environment, for the quarter to September 30th, 1998, show an average price for a new house of £127,071, while the average price of an existing house is £147,615. The figure for new houses is 2.2 per cent up on the previous quarter, while the figure for existing houses is up 13.3 per cent, according to a spokesman.