AKC News // House Price rises continue to moderate as interest rate environment stiffens

Rate of price growth falls to 0.6% for October - fifth consecutive decline in growth rate.

Monday 27th November 2006: House Prices nationally rose by 0.6% in October, a reduction in the rate of growth for the fifth successive month. The figures reinforce the view that the recent series of interest rate rises introduced by the European Central Bank (ECB) are having an impact on house price growth in Ireland. However due to the particularly strong growth in the first half of the year, the rate of growth so far this year at 11.6% is higher than expected. It compares to 9.3% for the full year of 2005 and 6.8% for the same period last year (2005). However the year on year growth rates declined nationally and in all market sectors in October. This is something that has not happened since December 2004.

Looking specifically at October the price of houses nationally rose by 0.6% during the month, down from the rate of 0.7% recorded in September this year and the 1.0%, 1.1%, 1.2% & 1.6% recorded in August, July, June & May respectively. The index also reveals that over the last twelve months (i.e.: from October 2005 to October 2006 inclusive) the growth in national prices was 14.2%. This is down significantly from the rate of growth to September ?06 (15.0%).

The average price paid for a house nationally in October of this year was EUR309,963, more than EUR32,000 higher than that recorded for December 2005 (EUR277,852).

Commenting on the results, Niall O'Grady, Head of Marketing, permanent tsb said: "It's important to note that while the rate of increase continues to moderate, the fact is that national house prices continued to rise in October, highlighting the continued strength of the housing market. Having said that, its clear that we?re moving into a new stage in the price cycle. The positive thing is that so far it appears that this new phase will be characterised as a soft rather than a hard landing."

Dublin V Rest of Country

House prices in Dublin and Outside Dublin both grew by 0.9% and 0.2% respectively in October. In September 2006 the relative price increases were 1.7% and 0.6%.

House prices grew by 17.4% and 13.8% in the twelve months to October 2006 in Dublin and Outside Dublin respectively. The equivalent rates to the end of September 2006 were 17.9% and 15.1% respectively. For the first ten months of 2006 growth rates for Dublin and Outside Dublin were 15.0% and 11.1% respectively. The equivalent rates for September this year were 13.9% and 10.9%, while for October last year were 7.8% and 6.6%.

The average price paid for a house in Dublin and outside Dublin in October 2006 was EUR423,727 and EUR266,912 respectively. The equivalent prices at the start of 2006 were EUR368,576 and EUR240,201.

Commuter Counties: - Louth, Meath, Kildare & Wicklow

House prices in the commuter counties of Dublin grew by 0.8% in October 2006, compared to 1.1% in September 2006.

House price growth in the commuter counties year on year to October 2006 was 18.0%, down from that recorded to September 2006 (18.3%), while more than twice the rate recorded to October 2005 (6.6%). Growth in the first ten months of this year was 15.2% compared to 7.7% last year. The price of a house in the commuter counties in October 2006 was EUR344,431, up over EUR45,000 from EUR298,866 in December 2005.

3 Bedroom Semi-detached Houses

The average price for 3 bed semi-detached house grew by just 0.1% in October, down from the rate in September 2006 (0.7%) while in October last year growth of 1.8% was registered.

House prices in this category grew by 15.7% in the twelve months to October 2006, down from 17.7% in September 2006, while that recorded in October 2005 was 8.3%. In the first ten months of this year growth was 13.0% compared to 7.8% in same period last year. The price of a 3 bedroom semi in October 2006 was EUR310,568, up over €35,000 from EUR274,870 recorded in December 2005.

First time buyers V. Second time buyers

House prices for first-time and second-time buyers increased by 0.4% and 0.6% respectively in October 2006. In September 2006 the respective figures were 0.7% each.

House prices grew by 13.6% and 14.4% year on year to October 2006 for first-time and second-time buyers respectively. The equivalent rates to the end of September 2006 were 14.6% and 15.1% respectively. In the first ten months of this year growth rates for first-time and second-time buyers were 11.7% and 12.1% respectively, while growth rates this time last year were 10.8% and 6.1%.

The average price paid by a first-time buyer and a second-time buyer in October 2006 was EUR278,805 and EUR348,709 respectively. The equivalent prices in December 2005 were EUR249,499 and EUR311,168.

New V. Existing Houses

House prices for existing houses increased by 0.8% while new house prices fell by 0.4% in October 2006. In September 2006 the respective increases were 0.8% and 0.4%.

New and second hand house prices grew by 12.6% and 12.3% respectively year on year to October 2006. The equivalent year-on-year rates of growth to September 2006 were 14.7% and 12.8% respectively. In the first ten months of this year growth rates for new and existing houses were 8.8% and 10.2% respectively. The equivalent rates last year were 6.2% and 6.3%.

The average price paid for a new house in October 2006 was EUR300,479, while that paid for a second hand house was EUR312,709. The equivalent levels in December 2005 were EUR276,215 and EUR283,708.

Source: permanent tsb / ESRI House price index

For full Permanent TSB/ESRI House Price Index see the "Indices" Section of our website or click here.

Date : 30-11-2006