House price increase slows but shows 16% lead on previous year

The price of existing homes in Ireland fell last summer, according to new data from the Department of the Environment. But they were still more than 16 per cent stronger than a year earlier.

The data show the price of second-hand homes nationally slipped by 0.4 per cent in the June to September quarter from the previous three months. In Dublin, the fall was greater at 4.5 per cent.

But summer is traditionally a quieter period for property sales, sandwiched between the more popular spring and autumn selling seasons.

On an annual basis, the price of second-hand homes rose 16.1 per cent across the State and 16.6 per cent in the capital.

The market for new houses remained positive in the three months, with prices rising more strongly in Dublin.

Nationally, new homes saw prices rising by 1.3 per cent but this rose to 2 per cent for Dublin.

When compared to September last year, the price of new homes is also still rising strongly. In the 12-month period, the cost of a new home in the State as a whole was 13.7 per cent ahead while, in Dublin, the figure was 10.7 per cent.

A new home in Dublin now costs an average of €295,158, falling to €225,356 nationally. Second-hand property still attracts a premium with the average price in Dublin now fractionally above €350,000. For the State as a whole, the figure is €266,444.

The figures reflect the trend evident in recent months in the Permanent TSB house price index, which is compiled in association with the Economic and Social Research Institute.

Its most recent survey, released at the end of last month, shows prices nationally rose by 13.9 per cent in October, fractionally up on the 13.8 per cent figure for September.

It said that second-hand homes were 14.5 per cent more expensive across the State in October than at the same time a year earlier while new homes cost 11.1 per cent more.

The Minister of State for Housing and Urban Renewal, Mr Noel Ahern, said the Government remained concerned at the level of house price inflation.

"This Government will not shy away from a challenge and we remain committed to pursuing measures to improve availability and affordability of housing," said Mr Ahern.

The Department of the Environment also released figures yesterday showing that the number of new houses built in the State in the first nine months of the year rose 18.3 per cent on the previous year. Completions in 2002 had hit record levels.

A total of 47,758 housing units had been completed by the end of September. The Minister said that, based on that result, "2003 is set to be the ninth successive year of record house completions". Last year, 57,695 properties were built.

Dublin continues to see the fast growth rates, up 16.2 per cent, followed by the greater Dublin area (up 11.1 per cent).

Local authority construction was 34.7 per cent ahead of least year, with 3,276 new homes built.

An additional 1,113 housing units were provided by the voluntary and co-operative sector, up 18.5 per cent on the same period in 2002.