House prices pick up over summer - report

House prices picked up over the summer for the first time in two years, according to the latest Permanent TSB house price index.

The August survey showed that prices rose by 1 per cent nationally last month, slightly ahead of the 0.9 per cent increase in July and just behind the 1.1 per cent rate in August 2004.

Over the last 12 months, house prices nationally have climbed by 6.2 per cent, the same as in July. The average price for a house last month was €265,364, just over €11,000 up so far this year.

Permanent TSB head of marketing Niall O'Grady said first-time buyers had seen particularly heavy increases.

"First-time buyer growth has been particularly strong compared to other sectors as they switch their focus to existing houses rather than new ones following stamp duty changes introduced in the last budget," he said.

First-time buyers saw prices leap 1.9 per cent in August compared to 1.1 per cent inflation for those moving up the property ladder, according to the monthly survey compiled in association with the Economic and Social Research Institute.

Over the first eight months of the year, first-time buyers prices have risen twice as fast as those for existing homeowners - 7.6 per cent compared to 3.8 per cent.

The average price paid by a first-time buyers last month was €238,212, still lower than the €298,066 paid on average by those moving homes.

However, while new house prices rose 0.2 per cent last month compared with a rise of 1.1 per cent for second-hand homes, new homes have accelerated more rapidly over the 12-month period - costing 7 per cent more now than a year ago compared to a 6.1 per cent increase for existing property.

The 1.1 per cent rise in prices of residential property outside Dublin last month was almost twice the 0.6 per cent increase recorded in the capital.

However, over longer periods, prices rises have been pretty uniform between Dublin and the rest of the State - 5.2 per cent year to date in Dublin against 4.2 elsewhere and 7.2 per cent over the last 12 months as against 7.7 per cent outside the city.