House prices are rising faster than last year

House prices throughout the State are rising faster than last year, two studies published yesterday said. Figures compiled by the Department of the Environment and Local Government and by the Irish Permanent showed contrasting rates of increase in the first six months of the year, but both indicated the growth rate for new and secondhand homes throughout the State had yet to slow.

The Department, which claims its figures are the most comprehensive, said the price of secondhand homes rose by 8.9 per cent in the January-June period, up from 6.2 per cent in the first half last year. It said the price of new homes nationally increased by 5.8 per cent in the first half of the year. Prices rose by 5.2 per cent in the same period in 1999.

The Irish Permanent figures, compiled in association with the ESRI, showed stronger increases in the first seven months of the year. The mortgage lender said prices for new and second-hand houses rose by 12.5 per cent in this period, up from 9.6 per cent a year earlier.

The Minister for Housing and Urban Renewal, Mr Bobby Molloy, claimed the Department's figures were based on returns from all mortgage lending agencies. "They are, therefore, comprehensive and provide an unrivalled reflection of national trends."

But Fine Gael's housing spokesman, Mr Billy Timmins, questioned the figures. "The Department of the Environment and Local Government's information is more optimistic than all the other institutions," he said, adding that this may be unfounded.

Labour's environment spokesman, Mr Eamon Gilmore, called for a "fundamental change" of approach and said he had no confidence that Dr Bacon's latest proposals would work. The Government should treat the housing crisis as a social issue with an emphasis on increasing the supply of building land, he said.

A spokesman for the Department said nobody could claim to be happy that prices were rising as fast as the figures showed. "But the fact of the matter is that we'll see what effect the Bacon III measures have in the following quarters." The spokesman accepted that measures adopted after Dr Bacon's first two reports had failed to arrest property price rises, but said overall growth in the market had since slowed down.

The Department said new homes in Dublin cost an average £177,795 (€225,753) in the second quarter of the year, 20.7 per cent more than in the same period last year. Second-hand homes in the city cost an average £196,044 in the April-June period, 22.7 per cent more than in the same period last year. New houses throughout the State cost £131,821 in the April-June period, 17.2 per cent more than last year.

Irish Permanent said national house price growth rose 1.9 per cent in July, slightly stronger than the 1.8 per cent increase it recorded in June. Its figures are confined to properties purchased by its mortgage customers.

Separate figures published by Ulster Bank showed Northern Ireland house prices in all sectors were 11.21 per cent stronger in the second three months of the year than in the same period last year. Apartments were 24.83 per cent more expensive in this period than last year.