House price rises in the Republic appear to be moderating, with an increase of 4.6 per cent in the first four months this year compared to a rise of 6.4 per cent over the same period last year.

According to the Irish Permanent House Price Index published yesterday, house prices increased by 1.4 per cent in April after growth of 1.2 per cent in the previous month.

The annual increase in national house prices was 27.6 per cent in April, compared to 29.8 per cent last December.

Mr Billy Kane, chief executive of the Irish Permanent, said: "The future of the first-time buyers market will depend upon the supply side because research shows that there is strong demographic support for the market.

"The supply is improving, though, and we expect as many if not more houses to be completed than the record breaking figure of 42,000 for last year."

Prices in Dublin continued to rise more rapidly than the rest of the State, with an increase of 1.4 per cent in the capital compared to 0.9 per cent elsewhere in April.

The index shows that for the year to April, price growth in Dublin has been 5.9 per cent, much higher than the 3.9 per cent growth around the rest of the State.

New house prices have increased by 7.8 per cent in the first four months of the year as against 2.9 per cent for second-hand homes.

This represents a major change in the second-hand market, when compared to the 7.8 per cent increase for the same period last year.

On a national basis, prices increased by 0.4 per cent for first-time buyers and by 2.6 per cent for second-time buyers in April representing an increase of 5.7 per cent and 4.0 per cent respectively for the year to date. This represents a reversal of the trend for the same period in 1998 which saw second-time buyer prices increasing by 8 per cent as opposed to 5 per cent for their first-time counterparts.

The average price paid by a first-time buyer for a house in April was £86,885 with the average price of a new home up to £104,536. The divide between Dublin city and county and other areas continues with prices paid by first-time buyers in the capital increasing by 8.6 per cent in the first quarter up from 5 per cent, while outside Dublin prices increased by 4.8 per cent and 3.6 per cent respectively.

New house prices increased at a faster pace in Dublin moving from 2 per cent in the last quarter of 1998 to 10.8 per cent in the first quarter of this year compared with 5.3 per cent and 5.6 per cent respectively outside the capital.

In contrast, growth in second-hand house prices declined to 1.6 per cent in the first three months of the year from 4.2 per cent in the last quarter of 1998 in Dublin. The drop was mirrored in the rest of the State where prices decreased from 5.9 per cent to 2.6 per cent for the same periods.

Apartment prices continue to rocket with prices increasing by 9.1 per cent in the first quarter of this year representing an increase of 35.9 per cent from the same period last year.

The proportion of lending by the Irish Permanent to first-time buyers, however, continues to drop, down to 32 per cent nationally. The average mortgage for the first quarter was up 10 per cent compared to last year with 76 per cent of mortgages going to borrowers in the 25-44 age group.