The changes to stamp duty on house purchases announced in the budget have increased the price of houses for first-time buyers, according to auctioneers Douglas Newman Good.
A survey published today by Douglas Newman Good revealed that house prices have increased by 14 per cent over the past 12 months.
Stamp duty changes and low interest rates have served to maintain strong demand at the mid to upper level of the residential market, according to the survey.
Minister for Finance Brian Cowen abolished stamp duty for first-time buyers on houses up to a value of €317,500 in the December budget, and the ECB has held off rate increases as the euro zone economy remains in the doldrums.
Mr Paul Murgatroyd, economist with the auctioneers, said: "It was clear from the very end of last year that the changes to the stamp duty regime for first-time buyers of second-hand property would boost prices at the starter home end of the market and this has certainly been the case."
The average price of a second-hand house in Dublin has climbed above the €400,000 mark, compared to €272,000 three years ago.
In the first three months of 2004, prices increased by 2.2 per cent for property worth less than €350,000, whereas this year the increase was double that at 4.5 per cent.
Further up the value chain, demand has continued to outstrip supply as people continue to trade up due to the prevailing low interest rate environment.
The more limited supply of good-sized family homes in suburban locations has meant that prices have risen faster in the last 12 months than in any other residential sector, according to the analysis.
In the past 12 months the average price of homes worth €700,000 or more has increased by some 23 per cent, according to Douglas Newman Good.