House prices on the increase yet again

THE annual rise in house prices has more than doubled in the year to end November to 11.9%, boosted by a sharp rise of 5.5% in the last four months.

By year end the increase could be as high as 13% year-on-year based on the sharp rise seen in recent months.

In November prices rose 1.4% which means prices have risen by 5.5% in the last four months.

By end of November price rises of 11.9% in year to date are more than double that of last year.

Details of the renewed vigour in the cost of buying a home are contained in the latest edition of the Permanent TSB House Price Index.

This is compiled in association with the ESRI and it shows that house prices nationally grew by 1.4% during November, resulting in an increase of 4.2% and 5.5% in the last three and four months respectively.

The index also reveals that house prices nationally grew by 11.9% in the year to date November 2002. That contrasts sharply with the much more modest rise of 5.3% over the same period last year.

Over the past 12 months from November 2001 to November 2002 prices have risen by 11% with the difference being put down to a fall in prices in late 2001.

Nationally the average price paid for a house in November was 203,407 while the equivalent price in November 2001 was 183,253.

The Permanent TSB house price index is compiled in association with the ESRI and has become the barometer of house price movements in the country.

Niall O'Grady, general manager Permanent TSB said: "Following a softening of the market in the second half of 2001 when prices began to fall, the recent months have seen strong price increases and we expect the growth for the full year to be in the order of 13%."

It was too early to forecast the impact of the budget changes on the year ahead, said Mr O'Grady. But he predicted an easing of prices next year. He said the combination of increased housing supply and easing economic growth "will see a moderation in the rate of price growth over the coming months".

On a comparative basis Dublin prices rose 1.9%, while outside Dublin they went up by 1.1% in November 2002. In October the respective rates of growth were 2.6% and 1.1%.

For November 2001 the respective growth rates were 0.9% and 0.3%.

The average price paid for a house in Dublin in November was €267,009 while the equivalent price for a house outside Dublin was €178,654. The equivalent prices in November 2001 were €238,696 and €161,285.

The growth-rate of house prices in Dublin and outside Dublin over the year to date were 13.5% and 11.5% respectively.