First-time buyers pay more than €250,000 to get on property ladder

First-time buyers are now paying more than €250,000 on average to get on the property ladder, according to new figures, prompting calls for the Government to introduce special measures to help people struggling to afford their own home.

The latest Permanent TSB Economic and Social Research Institute (ESRI) house price index shows that prices are continuing to climb, rising by another 1.2 per cent in January.

In the 12 months to the end of January, national house prices rose by 10.2 per cent, compared to an annualised growth rate of 9.3 per cent in December.

The average price paid for property by first-time buyers has surpassed the quarter-million-euro mark for the first time and stands at €251,281, according to the survey.

Over the 12 months to the end of January, the prices paid by first-time buyers increased by 13.9 per cent, compared to a 9.6 per cent increase for second-time buyers.

Labour Party environment spokesman Eamon Gilmore said yesterday young people were now giving up on the idea of owning their own home.

He said the figures exposed "the myth that the housing market has calmed" and that the market was showing no sign of slowing down. "With house prices now rising by 10 per cent annually, at between three and four times the rate of inflation, there is a need for a total shift in Government policy," he said.

"In urban areas, Dublin in particular, many young couples have simply given up on the idea of being able to buy their own home."

Insufficient social and affordable housing and a failure on the part of the Government to meet its commitments in these areas have exacerbated the situation, Mr Gilmore said, adding that the Government must now intervene in the market.

The average price paid for a house nationally in January was €281,197, €26,000 higher than the €255,107 cost in January 2005.

Niall O'Grady, head of marketing at Permanent TSB, said the year-on-year growth rate of 10.2 per cent was consistent with its forecast of 10 per cent growth in the market in 2006.

The average price paid for a house in Dublin in January was €373,096, compared to €243,826 outside Dublin. A year ago, the average amount paid was €336,028 in Dublin and €220,550 outside Dublin.

The average price paid in the commuter counties of Louth, Meath, Kildare and Wicklow in January this year was €304,500, compared with an average price tag of €272,164 in January 2005.

New and second-hand property prices grew by 10.7 per cent and 8.8 per cent respectively over the past 12 months.