House prices in Dublin for the first quarter of this year averaged £142,000 for new houses and £150,000 for secondhand homes, according to provisional data, the Minister of State for Environment, Mr Robert Molloy, told the House.

He rejected economists' forecasts that house prices are expected to rise by an average of 20 per cent this year. Mr Molloy said his provisional figures were derived from all loan approvals which "will include some very expensive houses in premium locations. The average price paid by first-time purchasers is significantly lower."

Labour's environment spokesman, Mr Eamon Gilmore, who raised the issue during Environment questions, asked the Minister how much he expected house prices to rise by.

Mr Molloy said neither he nor the Department was in the business of making such forecasts. He was satisfied there was strong evidence of moderation in the houseprice increases experienced in recent years.

Mr Gilmore said, however, it was difficult to accept this generalising by the Minister because it echoed what he had said last year. "Since then, house prices have increased by 22 per cent." He said that if economists were in a position to give an estimate of price increases, "it is not unreasonable to ask the Minister of State and the Department with responsibility for housing to indicate to the House by how much they expect house prices to rise this year".

Mr Molloy reiterated that the measures the Government had taken were having an effect on prices and further measures due to come into effect would further improve the situation.

The forecast of a 20 per cent increase for 1999 might have been prepared "before the very large increase in housing output in the first quarter of 1999 was known", he said. "New house completions for the first three months of 1999 were 24 per cent higher than in the same period last year. Most significantly, there was a 28 per cent increase in output in Dublin where housing output had been relatively sluggish in recent years."

He pointed out that Dublin second-hand house prices, which had been the leading indicator of price trends for a number of years, "suggest an increase of 1 per cent and a total increase of only 2 per cent over the last six months".

Mr Gilmore, however, asked the Minister to confirm that two teachers with a salary of £20,000 could not afford to buy a house. Given the £142,000 and £150,000 cost of houses, the Minister had to be aware of the income threshold required to enable somebody to buy a house, he said.

Mr Molloy said, however, that the average house price included houses which might have cost up to £1 million. He was interested in affordable housing and the cost to first-time buyers. "These people are my main concern. The lending agencies analyse their figures and publish their results. The index published by the Irish Permanent puts the average price of a house for first-time buyers nationally at £86,885 in April 1999."