House price growth accelerates in July

House prices growth accelerated in July although the annualised rate continued its downward trend, according to figures released yesterday.

Figures from Permanent TSB and the ESRI show that prices paid by first-time buyers for homes are rising significantly faster than for the rest of the population.

The price of houses nationally rose by 0.9 per cent last month. The figure is well ahead of the 0.3-0.6 per cent range of rises in the previous three months.

However, on an annualised basis, the cost of residential property in the State rose by 6.2 per cent, fractionally down on the 6.3 per cent recorded in June.

The corresponding figure in July last year was 11.1 per cent.

Prices have grown by just 3.3 per cent in the first seven months of the year, according to the ESRI and Permanent TSB, the lowest rate for the equivalent period in nine years and notably weaker than the 5.6 per cent rise in prices in the January-July 2004 period.

First-time buyers continue to encounter significantly more aggressive house price inflation than other homebuyers.

In July, first-time buyers saw prices jump 1.4 per cent against 0.7 per cent for homeowners moving up the housing ladder.

So far this year, prices paid by first-time buyers have risen by 5.6 per cent, more than double the 2.6 per cent growth rate for existing homeowners, fuelled partly by the growing number of first-time buyers opting for existing rather than newly-built property.

Over the last 12 months, the respective figures are 8.9 per cent and 5.2 per cent.

The average price paid by a first time buyer in July was €233,856 compared to €294,790 for second-time buyers.

Niall O'Grady, head of marketing at Permanent TSB, said July had seen an acceleration in the monthly growth rate which had averaged 0.4 per cent in the first half of the year.

Prices in Dublin rose faster than those elsewhere in the country in July - 1 per cent compared to 0.8 per cent - with the average property in the capital now costing €350,192.