AKC News // Drop in house prices for first-time buyers

House prices for first-time buyers appear to be easing slightly, according to the latest survey from Permanent TSB and the ESRI. The figures for January show prices for second-time buyers rising by 1.6 per cent, but there was a 0.2 per cent drop for first-time buyers.

Nationally, house prices for January increased by 0.8 per cent, which represented a slight easing in the rate of increase, which has been running at an average of 1.2 per cent for the last six months.

The index reveals that house prices nationally grew by 15.2 per cent year-on-year to January 2003. This was the highest year-on-year increase since the 12 months to May 2001.

Permanent TSB said there were increasing signs that supply was starting to match demand in the first-time buyers? market, with a large number of new developments coming on stream in January.

Mr. Niall O'Grady, general manager, marketing, for Permanent TSB, said the drop for first-time buyers was small but significant when compared to last year. He said the good news should continue for people starting on the housing ladder but he was less optimistic about prospects for second-time buyers.

"It is likely that the pressure bubble is now moving up the housing chain as people who got their first house a few years ago are now seeking to move on to larger, more established homes, which are in relatively short supply."

He also said there was "anecdotal evidence" that very expensive houses were proving hard to sell in the current market, although the monthly Permanent TSB figures do not review different market segments.

Dublin house prices rose by 1.1 per cent in January, while outside Dublin there was growth of 0.3 per cent. This has been the pattern of recent years, although the gap in prices between Dublin and other parts of the State has narrowed in the past two years.

The average price paid for a house nationally in January 2003 was €207,454, compared to the price in January 2002 of €180,141. The average price paid for a new house in January was €200,641, compared to €185,726 in the same period the year before. The price for second-hand houses in January was €213,615, compared to €180,040 in January 2002.

Mr. O'Grady said, while the increase in national prices for January of 0.8 per cent was relatively low, on an annual basis this amounted to about 10 per cent.

"It will be critical to monitor in the coming months the different price trends emerging at the new and established ends of the housing market," he said.

Date : 20-03-2003