Nine-year low for house price rises
The latest monthly survey carried out by the mortgage lender, in conjunction with the Government think-tank, found that house prices grew by just 1.8% in the first five months of the year.
This was less than half the 3.7% recorded in the same period last year and the lowest rate ever recorded since the survey was first carried out nine years ago.
The survey also found that, over the 12 months to May 2005, average house prices grew by 6.6%.
This was significantly lower than the 11.5% recorded in the previous 12-month period.
But the first-time buyer end of the market remained strong, with prices growing by 3% between January and May. This compared with an increase of 2.6% in the same period last year.
Permanent TSB’s head of marketing Niall O’Grady said that the house price growth recorded in the study was “exceptionally low” but there were significant variations between different sectors of the market.
“In particular, it is striking that house price growth for first time buyers was 3% over the first 5 months of the year - compared to just 1.5% for second-time buyers,” said Mr O’Grady.
“The first-time buyer sector continues to warrant careful attention,” Mr O’Grady added.
The average price of a house in May was €258,898, almost €16,000 higher than a year ago.
First-time buyers paid an average of €227,915, while those trading up to a more expensive property paid an average price of €291,515.
These figures were 8.3% and 5.8% higher than 12 months ago.
The survey also showed the price gap between Dublin and the rest of the country continued to widen during May.
Average prices in Dublin hit €343,562 at the end of May, which was 53% higher than the €224,366 average registered in the rest of the country.
The difference between the Dublin and provincial averages was less than 50% a year ago.
Average prices outside Dublin rose by just 5.3% over the 12 months to May, while those in the capital were 7.5% higher than in May 2004.
Price increases in the Dublin area in the first five months of the year slowed to 2.6%, down from 3.9% in 2004. Meanwhile, the price hikes in the rest of the country fell from 4.6% in early 2004 to just 2% between January and May this year.
There were increases on the price of new houses, however.
The average new house changed hands for €257,584 in May, around 9% more than a year ago.
New house prices grew by 2.5% between January and May but this compares with the 5.7% hike seen in early 2004.
Second-hand houses were sold for an average of €266,173 in May, 6.4% more than in May 2004.
Prices rose by just 1.5% between January and May 2005, after a 3.7% increase in the same period last year.
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