The average price of a second-hand property in Dublin rose sharply by 4.2 per cent during the final quarter of 2002, bringing the increase nationwide for the year to 20.5 per cent, a report says.
According to figures published by estate agents Sherry FitzGerald Group today, the pace of inflation in the rest of the country was slightly more moderate at 3.4 per cent bringing the rate of increase in Ireland to 20 per cent for the 12 months to December 2002.
Ms Marian Finnegan, chief economist with Sherry FitzGerald, said the increases had to be viewed in the context of an 18-month period starting mid-2001.
"During the difficult months of the later half of 2001 the price of property had fallen in value reflecting a loss in consumer confidence in the performance of the market," she said.
"The strength of price inflation in 2002 can therefore be partly explained by the pent-up demand from the previous year when transaction levels almost stagnated".
The pace of price inflation in the regional centres of Galway, Cork and Limerick throughout the year was particularly notable.
Initially fuelled by a resurgence in first-time buyer and investor demand in the opening months of the year, the accelerated demand spread throughout all sectors of the markets as the year progressed.
A preliminary analysis of the profile of purchasers in the second-hand markets of Dublin and Cork during the year reveals that first-time buyer demand has been particularly strong, purchasing an estimated 32 per cent of the second-hand properties traded and closed during the 12 months.