9% rise in price of new homes last year

The average price of a new home increased by 9 per cent last year to €314,087 while second-hand homes increased in price by 6.8 per cent to average €375,577, according to the Department of the Environment's Annual Housing Statistics Bulletin 2006, published today.

The biggest price increase in the State was for new homes in Dublin, which saw a 16.1 per cent increase, to average €419,330, while the most expensive homes were second-hand dwellings in Dublin, which saw an 8.9 per cent increase last year to average €517,865.

Almost 33,000 housing units were completed in the first five months of this year - an average of 1,600 per working week.

Minister of State for Housing Batt O'Keeffe said last night that while there were "indications of some easing in housing activity, the rate of output to date remains robust, suggesting another year of high output".

Among other information in the bulletin is the finding that almost half - 47 per cent - of all new house mortgages taken out last year were by first-time buyers. They were typically aged 30.

One third of these had 100 per cent mortgages and the most typical loan was for 31 or 35 years.

Mr O'Keeffe said house prices had eased since the last quarter of 2006.

"This was the result of reductions in affordability due to interest rate increases and very steep price escalation in the previous 18 months or so.

"Mortgage lending is essential to the housing market but recent experience shows how lending can add to market cycles."

He said it was "desirable" that institutions take into account the overall impact of lending policies on the housing market, while borrowers needed to take account of long-term costs and the fact that interests rates were going up.

The bulletin also indicates the amount of "residential zoned serviced land" increased by 3,400 hectares between June 2004 and the end of last year, to 15,900 hectares. This has a potential estimated housing yield of 492,000 units, according to the Ddepartment.

Some 14,686 households received financial help from the State with buying a home in 2006. Benefits included affordable housing measures, mortgage allowance towards buying a home, and aid via voluntary and co-operative housing projects.