House prices are expected to grow much more slowly in 2005 than over the past few years as house-buying hunger begins to abate, economists predict.

According to a Reuters survey of 10 Dublin-based economists, published yesterday, house prices will rise by 11.5 per cent on average in 2004 but growth will halve to just 5.5 per cent next year.

In 2003 and 2002, house prices grew by 13.7 per cent and 13.3 per cent respectively, according to the Permanent TSB/ESRI House Price Index.

"We wouldn't expect a significant appreciation next year given that rents are still falling and given that we're in a position where supply has at least caught up with demand," said Mr Rossa White, economist at Davy Stockbrokers.

He said sentiment was likely to be the driver behind lower growth rather than any specific trigger - such as a rise in interest rates.

"I wouldn't be surprised if we had a few years when we had 2-3 per cent growth," Mr White said.

The Central Bank warned earlier this year that a sudden end to the State's property boom posed one of the most serious risks to the Republic's buoyant economy and jobs market.

But economists do not expect a sharp drop given predictions of strong Irish economic growth over the next while.

Reuters