House prices rising by €65 a day
An average house costs €245,194, or around €458.33 a week, up €11,000 on the price recorded last December.
Although house prices rose in June at the slowest annual pace in 19 months, economists predict prices may end the year with a 10% gain, well ahead of the 3% yearly rise in salaries.
This doesn’t augur well for those on an average annual salary of around €28,000, or €76.71 a day.
The latest house price index, compiled by the Economic and Social Research Institute (ESRI) in association with Permanent TSB, shows a drop-off in the rate of increase of Dublin house prices.
Prices in Dublin grew by 4.3% in the first half of this year, compared to a 5.9% increase elsewhere, a reversal of last year’s trend when house prices grew at a rate of 7.2% compared to 5.5% outside the capital.
In the 12 months to June 2004, Dublin house prices grew by 9.6%, while outside the capital the growth rate was 13.4%.
“These figures confirm the trend of moderating growth in prices and the figures in Dublin are particularly significant,” Diarmuid Bradley, deputy chief executive of Irish Life and Permanent Plc’s banking unit, said in a statement.
The statement attributed the easing off in price growth to increased house- building, fuelled by rising employment and record low interest rates.
Local councils granted planning permission in the first quarter for twice as many dwellings as they did a year earlier. As many as 80,000 houses may be built in Ireland this year after 69,000 were built in 2003, Davy Stockbrokers predict.
The average price for a house in Dublin last month was €320,498 while outside the capital the price was €215,727. Prices in June last year were €292,359 in Dublin and €190,257 for the rest of the country.
Nationally, house prices rose by 4.8% during the first half of this year, compared to 6.9% last year.
The year on year growth rate was at its lowest since November 2002.
Mr Bradley says price growth this year should be in the region of 10%, down on past annual growth levels and lower than the near 14% registered for 2003.
House prices in Dublin rose 0.4% in May from April, less than half the national average of 0.9%, Irish Life said.
Still, house prices are rising faster than economists had predicted, boosted by a strengthening economy and rising employment. Ireland’s gross domestic product increased an annual 6.1% in the first quarter, while the number of people in work rose to 1.85 million from 1.83 million.
