House prices in the Republic continued to rise in October, but not as rapidly as the previous month, according to an industry index. The Irish Permanent said its house price index for the State showed a rise of 1 per cent - a significant drop from the September figure of 1.6 per cent, but still more than four times the rate of inflation.

For the January to October period, house prices rose 23.5 per cent, compared to 13 per cent for the same period in 1997, Irish Permanent said.

For the second month in succession, house price growth was stronger outside Dublin than in the capital, at 1.1 per cent compared to 0.8 per cent. For the 10 months to the end of October, however, prices in Dublin rose by 30.7 per cent, compared with 19.8 per cent outside the capital.

In the same period last year, Dublin house prices had risen by 23.4 per cent, while those outside the capital were up by 7.4 per cent.

Across the Republic, new house prices increased by 1.4 per cent in October, having remained flat for the previous two months. Price growth for second-hand houses stood at 0.8 per cent, down from the 2.4 per cent rise in September.

For the 10 months to the end of October, however, second-hand house prices rose at roughly double the pace of new houses, at 28.8 per cent against 14.8 per cent, according to the group.

The new quarterly index for apartments shows that between the first quarter of 1996 and the third quarter of 1998, apartment prices grew 81.7 per cent, outpacing house price growth of 53.9 per cent, but in line with Dublin's house price growth of 85.5 per cent.

"Looking to buyer type, prices paid by first-time buyers grew at a faster pace of 8.9 per cent in the third quarter than prices paid by second-time buyers, at 7.4 per cent," Irish Permanent said. "This was in contrast to the previous quarter, when price growth was stronger for second-time buyers than first-time buyers."

Researchers said despite these quarterly fluctuations there was really very little difference between price growth for first-time and second-time buyers, at 27 per cent and 29 per cent respectively.

The index is based on a figure of 100 for the year 1996. By October, the index for the Republic had reached 152.4, while the Dublin figure had touched 179.5.