House prices up by €400 a week

AVERAGE house prices have risen by almost €400 a week this year despite a slowdown in annual property inflation, from 13.6% a year ago to 9.8% in November of this year.

The price of the average house nationally in November was €253,769, up nearly €20,000 on that recorded in December 2003, €234,066.

The growth continues to slow, according to the Permanent TSB house price index, which shows that houses increased in value by 0.3% in November, the same as October. A new Dublin Commuter Index has been added to the monthly figures and this shows the price of a house in Louth, Meath, Kildare and Wicklow hit €272,000 in November, €60,000 below Dublin proper and €50,000 above outside Dublin.

The index, compiled by Permanent TSB in association with the ESRI, indicates the price of houses nationally rose by just 0.3% in November, well below the rates for June (0.9%), July (0.9%), August (1.1%) and September (1.0%). The rate of growth recorded in November 2003 was 1.2%.

The index discloses that in the last 12 months to the end of November 2004 the growth in national prices was 9.8%, which is down from the 10.8% and 12.0% recorded in October and September 2004, respectively. The comparable growth rate in the 12 months to November 2003 was 13.6%. Permanent TSB head of marketing Niall O’Grady said: “there has been a marked slowdown in the rate of house price growth during October and November. If this continues it is likely the 2004 growth will be just below 9%, slightly below previous predictions,” he said.

Mr O’Grady said the slowdown in the national growth rate is reflected in all categories and areas.

“The impact of increased housing supply on house prices is now being felt, particularly in prices in the Dublin commuter counties.”

House prices in Dublin and outside Dublin both fell by 0.1% in November 2004. In October 2004 the price changes were +1.0% and -0.5%, respectively.

In a new development, Permanent TSB and ESRI have developed an index of price movements in what are referred to as the Dublin Commuter Counties (Louth, Meath, Kildare and Wicklow).

This reveals that house prices in these commuter counties of Dublin fell by 0.5% in November 2004. Prices grew by 6.5% in the first eleven months of 2004, while the equivalent growth rate to November 2003 was 13.2%.

The surge in house building has eased pressure for first-time buyers, with the prices in that category falling by 1%, while prices for second-time buyers rose by just 0.4% in November 2004.

Over the first 11 months of this year new and second-hand house prices have grown by 11.4% and 8.1%, respectively.