House prices rise despite supply hike

NEW house prices are continuing to rise despite a record number of new homes being built.

According to the latest permanent tsb/ESRI house price index, the price of new homes rose by 1.8% in September, 2003, while second-hand prices rose by just 0.1%.

Growth in new house prices were driven by the increase in the prices of houses located outside Dublin. In August, the relative price change was 2.7% and 0.3% for new and second-hand houses.

House prices grew by 12% and 14.6% year on year to September 2003 for new and second hand houses.

The average price paid for a new house in September 2003 was €220,889, while that paid for a second hand house was €231,671. The equivalent prices in September 2002 were €197,142 and €202,125.

While Dublin house prices are €100,000 more expensive, there are signs that the rest of the country is seeing the same kind of house price inflation experienced in Dublin. Prices in the capital fell by 0.6% in September, though the average semi still costs close to €300,000.

The permanent tsb index said, over the three months to September, the price of new and existing houses in Dublin grew at less than half the rate of those outside of Dublin in the period (3.7% and 0.7% compared with 8.0% and 1.7%).

“Traditionally, we have seen higher rates [of growth] in Dublin than the rest of the country, but what we are now seeing is a move to moderate levels of growth in Dublin and then we would expect to see that happen in the rest of the country,” said Niall O'Grady, permanent tsb’s marketing manager.

The average price paid for a house in Dublin and outside the in September, 2003, was €296,454 and €195,439 respectively. The equivalent prices in September 2002, were €255,510 and €174,713.

House prices for first-time buyers increased by 0.9%, while prices rose by 0.2% for second-time buyers in September, 2003. In August, first time buyers saw no change in price, while those trading up saw prices rise by 1.7%.

House prices grew by 13.2% and 14.1% year on year to September 2003, for first-time and second-time buyers respectively. The average price paid by a first-time buyer and a second-time buyer in September 2003, was €197,492 and €254,311.