House prices expected to have grown 9%

HOUSE prices are expected to have grown 9% this year.

They grew 8.6% last year.

The average price of a house in Dublin in November was over €365,000, compared with just over €237,000 for the rest of the country. First-time buyers, meanwhile, are now paying almost €250,000 to get on the property ladder.

The latest Permanent TSB/ESRI house price index revealed the overall value of house prices nationally rose by 8% up to the end of November this year, compared with 8.4% over the same period last year.

Meanwhile, Dublin house prices grew by 9.2% in the first 11 months of this year, compared with 8.5% for the same period last year. The equivalent growth rate outside Dublin was 7.8%.

Price growth for first-time buyers continues to outstrip other market sectors, with the year-to-date growth figure at 12.2%, compared to an increase of 7.1% for second-time buyers.

Looking specifically at November, the price of houses nationally rose by 1.2% during the month, unchanged from October this year and four times the rate in November last year.

The average price paid for a house nationally in November of this year was €274,507, up over €20,000 on that recorded in December last year.

Head of marketing at Permanent TSB, Niall O’Grady, said: “This has certainly been a year of two halves with price growth strengthening considerably as the year went on.”

He added they expect that price growth in the New Year will continue at similar levels to this year.

“Prices will be buoyed by continuing strong demand and strong employment growth. The recent interest rate rise and the potential for further rate rises may impact to some degree as the year goes on, though there is no reason to suggest that this will have any dramatic impact on demand for the foreseeable future,” he said.

In commuter counties such as Louth, Meath, Kildare and Wicklow house price growth was up 8.6% in the first 11 months of the year. The equivalent growth rate to November last year was 6.5% for commuter counties.

The price of a house in the commuter counties in November this year was €294,457 up from €272,409 in November last year.

ESRI economist Shane Garrett said: “The pick up in house price growth captured by latest data reflects the strong state of the economy in such areas as incomes and employment.

“Prices are buoyed by strong mortgage lending growth and the current low level of interest rates.”

Over the first 11 months of this year new and second-hand house prices have grown by 7.8% and 7.1% respectively. The equivalent growth rates over the same period last year were 11.4% and 8.1%.