House price rises accelerated again in January this year, rising 1.7 per cent compared to December 1998, according to the latest index from Irish Permanent. Average prices were also some 29.2 per cent higher at the end of January than a year earlier.
The index - from the State's largest mortgage provider - shows that the 1.7 per cent rate of increase in January has accelerated from the average monthly growth rate of 1.3 per cent in the last three months of 1998.
The figures are at odds with the picture painted by the second Bacon report, published by the Government on Tuesday, which hailed the slowdown of house price inflation. However, Ms Jane Kelly, economist at Irish Permanent, cautioned against reading too much into one month's figures. "Price rises should start to fall towards the end of the year as supply comes on stream," she said.
The average price of a new home is now £101,911 (€129,400), according to Irish Permanent. In December the average new home cost below £100,000, at £99,352.
But these figures disguise wide variations in the cost of homes in different parts of the State. According to Irish Permanent, the average cost of a new house in Dublin was some £134,129 in January. Under current lending guidelines, a single earner would need a gross income of £53,115 a year to be able to afford an average new Dublin home.
And prices in Dublin are continuing to rise faster than those in the rest of the State. In January Dublin prices rose by 2 per cent compared with a rise of 1.6 per cent elsewhere.
The prices paid by first-time buyers grew faster than those paid by second-time buyers - also a reversal of a trend noted in the Bacon report. From the end of 1997 the report said the rate of price increase in houses bought by first-time buyers has fallen behind the rate of increase paid by non-first-time buyers.
However, in January the average price paid by a first-time buyer was £85,424, up 3.1 per cent on the previous month. Prices for second-time buyers rose by only 0.6 per cent.
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