House prices rose 1.6 per cent in May, a survey published today showed, bringing the rise in average national prices in the first five months of the year to 6.7 per cent, compared to just 1.8 per cent in 2005.
The 1.6 per cent rise last month was slightly higher than the 1.4 per cent recorded in April, the permanent tsb/ESRI House Price Index showed.
The index found that over the last twelve months from May 2005 to May 2006 the growth in national prices was 14.5 per cent, up on the rate of growth to April 2006 of 13.2 per cent, and more than twice that recorded in the twelve months to May 2005.
The Central Bank has warned that the economy's high dependence on the property sector, plus sharp rises in credit to the sector, constitutes a "significant risk".
The average price paid for a house nationally in May of this year was €296,361, up €18,500 on that recorded for December 2005.
"Price growth nationally remained strong in May," said Niall O'Grady, Head of Marketing at permanent tsb, Ireland's biggest mortgage lender.
"However we expect that the recent ECB rate increase - the third in a series over recent months - will start taking some of the fizz out of the market over the remainder of the year."
House prices in Dublin grew by 1.6 per cent and by 1.7 per cent outside the capital in May. In April the relative price increases were 1.1 per cent each.
For the first five months of 2006 growth rates for Dublin and outside Dublin were 7.1 per cent and 6.8 per cent respectively. The equivalent rates last year were 2.6 per cent and 2 per cent.
The average price paid for a house in Dublin was €394,795 in May compared to €256,418 outside Dublin. The equivalent prices at the start of 2006 were €368,576 and €240,201.
House prices in the commuter counties near Dublin - Louth, Meath, Kildare and Wicklow grew by 2.1 per cent in May 2006, compared to 1.2 per cent in April 2006. House price growth in the commuter counties year-on-year to May was 15.7 per cent, up slightly from that recorded to April 2006 (13.8 per cent), and more than twice the rate recorded to May 2005 (5.9 per cent). Growth in the first five months of this year was 8.2 per cent in these areas compared to 3.1 per cent last year.
The price of a house in the commuter counties in May was €323,363, up almost €25,000 from €298,866 in December 2005.
The average price paid by a first-time buyer and a second-time buyer in May 2006 was €263,954 and €333,340 respectively.