1% Increase in new house prices in three months

A gradual slowing of the rate of increase of new house prices was sustained in the three months to June, according to the Housing Statistics Bulletin, issued by the Department of the Environment yesterday.

New house prices increased by just 1 per cent nationally and 2.6 per cent in Dublin during the period. The annual rates of increase were 16.7 per cent nationally and 15.3 in Dublin.

The Dublin increase of 15.3 per cent is the lowest annual increase since 1996, contrasting sharply with a 37 per cent increase in the first quarter of 1998.

The figures suggest that the first Bacon Report and measures to remove an element of investor speculation in the new homes market have been helpful in slowing inflation.

While the trend in second-hand house prices, which includes a greater proportion of more expensive properties, was higher in the three months to June, when the first six months of the year were taken into account the rate of increase was 8.7 per cent nationally and 5.3 per cent in Dublin.

This was significantly lower than corresponding periods in either 1998 or 1997. The figures also reveal that house prices are now rising more rapidly outside Dublin, reflecting an element of "catching up" in house prices outside the capital.

The decline in the rate of increase was attributed to Government action in improving the supply of houses by the Minister of State for Housing and Urban Renewal, Mr Bobby Molloy. However, he warned that we must continue to expand housing output, "particularly in the Dublin area".

The bulletin also revealed that the number of new houses and apartments built in the first six months of 1999 was up more than 14 per cent nationally on the corresponding period last year. Housing output has been growing for six successive years and according to the Minister, "there is every likelihood that the new house output for 1999 will be significantly higher than the record 42,349 completions reached in 1998".

Output in Dublin was up 21 per cent, a factor which the Minister said was most encouraging. This, he said "is a vast improvement on the last few years" and he predicted the number of planning applications would ensure that a "significant increase in housing output in Dublin is set to continue".

The Irish Auctioneers & Valuers Institute (IAVI) said it "supports the Department of the Environment's claim that the heat appears to be going out of the residential market".