House price rise to continue: BOI

House price increases show no sign of abating this year according to predictions from the Bank of Ireland.

The price of second-hand houses is set to increase by 12% nationally bring the average price to €270,000.

Prices in the greater Dublin area are set to increase by 14% by the end of 2003.

The predictions were made by BOI’s chief economist Dr Dan McLaughlin, in the bank's quarterly Irish Property Review.

"New house prices will show smaller gains nationally, but it may be wishful thinking to expect any sustained price fall in the capital for those seeking to buy new houses," McLaughlin said.

A supply shortage in Dublin, high demand and continued affordability due to historically low interest rates were cited as the main reasons for price hikes in the report.

Sustained employment levels were also a factor according to the BOI data.

The review also states that improvements in commercial property prices will continue throughout the year.