First-time buyers face price rises of 9.4%

First-time buyers are facing price rises of almost twice that of those seeking a second-home, the latest edition of the permanent tsb/ESRI house price index has shown.

The cost of properties in the first-time buyer market increased by 9.4 per cent over the first nine months this year and now average €242,172. The report notes that first-time buyers have switched their focus to second-hand properties following stamp duty changes in last year's budget.

The average price paid by a first-time buyer in Dublin and outside Dublin in the quarter to September 2005 was €296,246 and €223,365 respectively. The equivalent prices in 2004 were €275,450 and €207,909.

The average price paid for a new house in September 2005 was €263,000; that paid for a second hand house was €274,941. The equivalent levels in September 2004 were €248,052 and €258,979.

For second-time buyers, prices rose by 4.8 per cent. Nationally, the price of houses has risen 5.4 per cent over the first nine months of the year, lower than the 7.8 per cent rise over the same period in 2004. However, the report notes that the rate of house price increase has increased in recent months.

The average price paid for a house nationally in September was €268,040, up almost €14,000 on that recorded in December 2004 (€254,215).

Niall O'Grady, head of marketing at permanent tsb, said after months of moderate growth this year, price increases are "suggesting a projected growth rate may be close to the 8.6 per cent level recorded in 2004".

He said Dublin and the commuter counties had experienced particularly strong growth rates. Dublin houses have increased by 6.4 per cent in the first nine months of 2005, while the equivalent growth rate outside Dublin was 5.2 per cent.

The comparative figures for the first nine months of 2004 were 7.5 per cent and 9 per cent respectively.

The average price paid for a house in Dublin and outside Dublin in September 2005 was €356,220 and €231,425 respectively. The equivalent prices in September 2004 were €330,603 and €222,077.

In the commuter counties of Louth, Meath, Kildare and Wicklow, house prices in the commuter counties of Dublin grew by 6.5 per cent between January and September.

The report notes that the difference in house price growth between a house in the commuter counties and one outside Dublin is almost 25 per cent, up from 10 per cent nine years ago.

The price of a new house in Dublin and outside Dublin in the quarter to September 2005 was €323,894 and €219,914, respectively - a difference of over €100,000. The equivalent prices in September 2004 were €301,936 and €209,979.