The annual rate of increase in the price of newly built houses is slowing down as the residential property market gradually returns to stability, according to the second report on the housing market prepared for the government by Mr Peter Bacon.
After reaching a peak in the first quarter of 1998, the annual rate of increase in new house prices has slowed, particularly in Dublin.
In another development to the benefit of first-time buyers, the report points out that supply of new homes is rising fast, with 42,349 completions last year - up 9 per cent on 1997. The number of planning permissions granted in each quarter of 1998 has continued to rise, pointing to further expansion this year. The acceleration in the rate of increase in new apartment prices in Dublin continued during 1998. The rate of increase in secondhand house prices has also continued to climb, especially in Dublin, although it appeared to fall towards the end of last year. Four and five-bedroom detached houses, including one-off period dwellings, saw the biggest increase in value, according to a survey by the Irish Auctioneers' and Valuers' Institute highlighted by Mr Bacon.
The report includes figures from a range of sources indicating Irish property price trends, particularly since the Government launched its Action on House Prices in April last year following the initial Bacon Report.
That report was commissioned by the Government because of concern about the impact of rapidly escalating house prices. First-time buyers were among those worst affected. Department of Environment figures contained in yesterday's report show that 50 per cent of first-time buyers in Dublin paid £90,500 or less for new houses between January and October 1998, and £85,000 or less for second-hand houses.
Ninety-five per cent paid under £141,375 for new houses and under £180,000 for second-hand houses.
In the rest of the State, 50 per cent of buyers paid under £70,000 for new houses and under £59,950 for second-hand houses. Outside Dublin, 95 per cent of first-time buyers paid under £125,000 for new houses and under £118,950 for second-hand houses.
The report shows that the Irish Permanent House Price Index paints a healthy picture for first-time buyers. Since the end of 1997, the rate of price increase in houses bought by first-time buyers has fallen behind the rate of increase paid by second-hand buyers.
Housing statistics from the Department of Environment and Local Government show that new house prices in Dublin still outstrip those in the rest of the State. By the third quarter of 1998, Dublin prices stood at a premium of 30 per cent to those in the State as a whole. The year-on-year rate of increase for new houses in Dublin fell from 32.4 per cent in the third quarter to a provisional figure of 25.8 per cent in the final quarter of 1998.
In the State as a whole, these figures rose from 20.1 per cent in the third quarter to a provisional figure of 23.3 per cent.
The year-on-year rate of increase in second-hand house prices in Dublin rose from 36.9 per cent in the second quarter to 41.7 per cent in the third. However, it fell to a provisional level of 27.4 per cent in the final quarter of last year, according to the Department of Environment statistics.
According to the IAVI annual property survey, the rate of increase in house prices in Dublin peaked in 1997, with the rates of increase for most types of houses being lower in 1998.