[Article] House price growth rate expected to slow to 8%

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House price growth rate expected to slow to 8%
From:ireland.com
Wednesday, 28th January, 2004

House prices nationally rose on average by 13.7 per cent in 2003 but the pace is expected to decelerate to between 8 and 9 per cent this year.

The Permanent TSB house price index, compiled in association with the Economic and Social Research Institute (ESRI), found that houses in Dublin 4 areas such as Donnybrook and Sandymount were the most expensive in 2003. It also highlighted a more than 20 per cent surge in house prices in Roscommon, Mayo and Monaghan last year.

Permanent TSB's general manager, Mr Niall O'Grady, said yesterday that the pace of price rises in regional areas was largely due to some catching up.

"There is evidence that the record number of new houses now being built is leading to moderation in the rate of growth for new houses while strong demand continues to feed into higher prices for second-hand houses," he said.

The bank estimated that 15-20 per cent of houses purchased last year were bought by investors who are continuing to buy residential property this year.

The rate of house price increases in Dublin last year was 12.7 per cent, down from 15.9 per cent in 2002. Outside the Dublin area, house prices rose by 12.9 per cent, ahead of 12.6 per cent in the previous year.

Dublin house prices rose by 1.3 per cent in December compared with a 2.1 per cent rise in the same month in 2002. In the rest of the State, house prices increased by 1.4 per cent last month, up from 1 per cent in December 2002.

The average price paid for a house in Dublin in December was €307,343, up from €272,671, while in the rest of the State the equivalent price was €203,759, compared with €180,405.

In Dublin, the Rathgar and Ranelagh areas were the next most expensive after Dublin 4, with house prices averaging €495,000. Dublin 18, which includes Foxrock and Carrickmines, was the third most expensive area followed by Clontarf and Marino, and Rathfarnham and Dundrum.

The least expensive houses in Dublin were purchased in Ballyfermot in Dublin 10, for an average of €200,000, and Clondalkin in Dublin 22 for €225,000.

The most expensive houses outside Dublin were in Wicklow, Kildare and Meath. Wicklow was the most expensive of these counties, with average house prices at €290,000. Houses in Kildare and Meath averaged €265,000 and €240,000 respectively. Donegal was the least expensive county in which to purchase a house with prices averaging around €170,000.

The biggest increase in house prices was in Roscommon, Mayo and Monaghan. In Roscommon, houses rose by 21 per cent to an average of €186,208. In Mayo, the price of housing increased by 20 per cent to €181,449 while prices in Monaghan also rose by 20 per cent to average €202,725.

The prices charged to first- time buyers increased by 14.7 per cent. In December, these buyers paid an average price of €205,185, while second-time buyers experienced increases of 13.4 per cent with an average price of €263,652.

Second-hand house prices increased at a faster rate than new houses last year as the number of houses being built edged closer to meet demand. New house prices rose by 10.8 per cent compared with a 14.4 per cent rise in second-hand houses.