House prices up by 1% in quarter

THE Permanent TSB and the ESRI house price survey for the first quarter of this year show the lowest rise since the survey began.

An increase in house prices of just 1% was recorded suggesting that a growth figure of 5% in the year 2005 was on the cards, said Niall O’Grady, head of marketing Permanent TSB Bank.

“While there are some significant variations within the different sectors of the housing market, the overall picture this year is one of consistently modest price rises resulting in the lowest level of national price growth in a quarter in nine years of researching these figures,” he said.

“Looking forward, these figures suggest that a national house price growth rate of 5% remains a very achievable outcome for the year as a whole,” he said.

Alan McQuaid, senior economist Bloxham Stockbrokers doesn’t disagree with the latest findings.

“I’m saying 6% for the year, and that’s based on a 0.5% hike in ECB rates in the second half of the year.”

If interest rates fail to go up, then prices in general might rise by 8%, he said.

“But there is not doubt that prices have started to ease back,” he said. The latest figures show prices in March rose by 0.3% compared with February, while the downward trend in the annual rate of growth continued, as this figure fell to 7.5% against 8.6% in 2004.

In Dublin, house prices were up 0.7% in March, giving an annual growth rate of 8.3%. Outside Dublin the figures were 0.4% and 6.5% respectively.

In the case of first-time buyers prices were up a modest 0.3% in March, while second-time buyers faced a slightly higher increase of 0.5% over the period.

The annual rates of growth were 7.3% and 7.8% respectively. Prices for new houses increased by 0.1% from February, while existing house prices were unchanged.

New house prices grew by 9.2% compared with March last year, while existing house prices were up 7.5%.

House prices in Dublin and outside Dublin increased by 0.7% and 0.4% respectively in March 2005.

In the 12 months to end March growth was 8.3% and 6.5% for houses in and outside Dublin respectively.

The price of a house in Dublin in March 2005 was €339,946 and outside the capital €222,077.

The equivalent prices in March 2004 were €314,138 and €208,575.

Last year, house prices across the country rose 8.6% compared with 13.8% in 2003.

Growth slowed sharply towards the end of the year - with prices up just 0.2% in December, the lowest monthly rise in 2004.