Average house costs soar by €13,000

THE average cost of buying a house in Ireland has risen by €13,000 since last December.

However, hard-pressed buyers have seen the rate of price inflation ease, according to the latest survey of the housing market.

The monthly permanent tsb/ESRI price survey shows the average house nationally costs nearly €250,000, a 5.7% increase since the beginning of the year.

The increase, though, is below the 8.1% that prices rose over the same period last year, as the market eases back due to extra supply.

For the month of July, house prices rose by just 0.9%, the same increase as June this year, but below the 1.1% recorded in July 2003.

Niall O'Grady, the head of marketing at permanent tsb said the trend so far this year confirmed slower house price growth for 2004 compared to each of the previous three years.

"These price trends support our projection of an annual rate of increase of 10% for the full year, a welcome moderation generated mainly by the recent surge in supply of new properties coming onto the market."

The survey also found that over the past 12 months the rate of increase has moderated. The growth from July 2003 to July 2004 was 11.1%. The year-on-year increase to the end of June 2004 was 11.5%.

But prices in Dublin rose faster than those outside the city with a 1.1% rise in July compared to 0.4% increase in June. Outside the city, price growth eased back in July, rising by 0.8% compared to a 1.2% rise in June.

For the year so far, Dublin prices were 5.4% ahead compared to a 7.9% rise in July 2003. The average semi will set you back €324,070, permanent tsb found.

Price growth for the rest of the country was the same as last year at 6.7%.

House prices for first-time buyers increased by just 0.5%, while rising by 1.2% for second-time buyers in July 2004. In June the price increases were 1.4% and 0.6%.

Prices for new and second-hand houses both increased by 0.9% in July 2004. In June the figures for new and second hand houses respectively were 1.1% and 0.7%.

Over the first seven months of the year new and second hand house prices have grown by 7.9% and 5.4% respectively.

Economists are expecting the end of double digit price rises this year as a record number of homes are built, with some commentators forecasting 75,000 new units to come on the market this year.