Over £1 billion in mortgage loans was advanced between July and September, the largest amount ever loaned in the sector in any three-month period and reflecting further rises in house prices, according to the latest figures from the Department of the Environment. The figures show that the most dramatic jump in loans occurred in the second quarter when mortgage loans increased by 34 per cent from £675 million to £907.4 million. In the third quarter, loans being granted increased by a further 11 per cent, rising to £1008,400. Just £774.3 million was advanced in loans in the third quarter of 1997. Loans for 7,188 news houses accounted for 40 per cent of this figure, with loans for 9,540 second-hand houses taking the remainder.

Banks, including the State's largest mortgage lender, Irish Permanent, extended £658.4 million, while building societies provided £348.9 million. Local authorities paid out £1.1 million, representing a successively declining amount in recent years.

However, the department acknowledges that the figures contain "an unquantified element of refinancing of existing mortgages". New and second-hand house prices continue to rise but the rate of increase has fallen in the three months to September 30th compared to the previous quarter. Announcing the figures, the Minister for Housing and Urban Renewal, Mr Robert Molloy, said new house prices nationally had risen by 1.8 per cent over the previous quarter, compared to a rise of 4.7 per cent in the previous three months. However new house prices are still 20 per cent up over the same period in 1997.

He also welcomed the number of house completions which was up by 8 per cent, from 9,964 in the second quarter to 10,784 between July and September. He said it appeared that a record of over 41,000 new house completions would be made this year.

A new house now costs £97,614 on average, compared to £95,885 for the April-June period. In the 1997 third quarter a new house cost, at £81,276, 17 per cent less than the current price.

But the average price of a new house for which loans were approved by building societies is now £101,016, compared to £96,376 for banks. The slow down in the rate of increase was more pronounced in the Dublin area. New house prices rose by 2.2 per cent in the July-September quarter compared to the previous three-months, as against a 10.6 per cent rise in the quarter to June 30th. A new house in Dublin now costs £127,071 on average, compared to £124,306 in the second quarter and £95,998, representing a rise of 32 per cent. The average building society loan in Dublin is £129,326. The slow down in the rate of increase is more muted in the second-hand house market, indicating that it remains more buoyant. Prices rose nationally by 8.2 per cent on the second quarter, to £110,321, compared to a rise of 11 per cent between the first and second quarters.

Year on year, second-hand house prices rose by 36.5 per cent from £80,774 in the third quarter of 1997.

The Dublin second-hand market remains the most expensive of all residential property markets. The average second hand house, at £147,615, is 16 per cent greater than the average new house of £127,071.