House prices rise by 12% in last year - survey

Irish house prices rose by over 7.8 per cent in the first nine months of 2004 to bring the rate of house price inflation for the last 12 months to 12 per cent, according to the permanent tsb/ESRI house price index.

The survey also notes that the rate of house price inflation for the first nine months at 7.8 per cent was down from the 9.4 per cent recorded over the same period the previous year.

In September, house prices in Dublin rose by 0.4 per cent while those outside the capital saw a 1.2 per cent growth in prices. In August, the relative price rises were 1.6 per cent and 0.9 per cent respectively.

The cost of a home in Dublin, now on average €330,603, has risen less sharply in 2004 than houses outside Dublin. Average house prices in the capital rose by 7.6 per cent while those outside Dublin rose by 9 per cent. Nationally, the price paid for a house in September was  €253,431, and the average price for a house outside Dublin was  €222,077.

In September 2003 the equivalent prices were  €296,454 for house prices in Dublin and €195,439 outside Dublin.

House prices for first-time buyers increased by 1.2 per cent to an average of €220,985 while prices rose by 0.9 per cent for second-time buyers to €285,216 in September.

This compares with €197,492 paid by first-time buyers in September 2003 and €254,311 by second-time buyers in the same month.

The price of new houses increased more quickly last month than second-hand houses. New house prices rose by 1.5 per cent in cost, compared with 0.8 per cent for existing houses.

A new house  cost €248,052 on average in September 2004, compared with an average of €258,979 for a previously owned.

Mr Niall O'Grady, head of marketing at permanent tsb, said the survey showed house price growth remained constant and robust. He said it looked likely that house price inflation would be about 10 per cent for the year, four times the rate of consumer inflation in the State.

Mr O'Grady said the results "underlines that the market continues to be underpinned by strong demand levels across the market".