House prices rise by 12% - survey

House prices have risen by 12.2 per cent for the 11 months of this year, although there are signs of a significant slowdown in 2004 especially in Dublin, according to new figures.

The ESRI-Permanent TSB monthly index suggests the property market is heading for a "soft landing" rather than a dramatic crash as suggested recently by the IMF and the Economist.

House prices rose nationally by 12.2 per cent in the period between January and November. This compared with 11.9 per cent in the same period during 2002.

During this November prices rose by 1.2 per cent. In September prices were up 0.5 per cent, while in October they jumped by 1.4 per cent. Those who compile the survey said there was some evidence that the rate of price growth was moderating, particularly in Dublin.

The average price paid for a house nationally in November was €231,109.

This was more than three times the price of a house back in March 1996, when the index started. The equivalent price in November 2002 was €203,407.

Commenting on the results, Mr Niall O'Grady, head of marketing with Permanent TSB, said: "It now looks inevitable that price growth for the year will be around 13 per cent - certainly that's a higher figure than most experts predicted when the year began. However there has been clear evidence of moderation in the rate of increase in prices - particularly in Dublin."

He said that if the trend continued into the New Year, price rises were more likely to be about 6-8 per cent nationally.

"This all supports the argument that we are looking at a soft landing for the housing market," he said.

He said the strongest evidence of moderation in the rate of price growth was in Dublin. In this market, house prices grew by 0.5 per cent in November while there was growth of 1.4 per cent for houses outside the capital.

He said house prices grew by 13.6 per cent in Dublin and 12.5 per cent outside Dublin in the 12 months to November 2003.

"These are strong growth rates but an easing in this growth in Dublin is certainly evident when compared to figures for the 12 months to end September and October of 16.0 per cent and 15.2 per cent respectively," he said.

The average price paid for a house in Dublin in November was €303,423 and outside Dublin it was €200,912.

The equivalent prices in November 2002 were €267,009 for Dublin and €178,654 for elsewhere.

House prices for first-time buyers increased by 1.7 per cent, while prices rose by 0.6 per cent for second-time buyers in November 2003.

The average price paid by a first-time buyer and a second-time buyer in November 2003 was €203,125 and €259,811 respectively.

The equivalent prices in November 2002 were €177,502 and €229,430.

House prices for new houses fell by 0.6 per cent in November 2003, while second-hand prices rose by just 1.6 per cent.

In October the relative price changes were 0.9 per cent and 1.3 per cent respectively for new and second-hand houses.

The average price paid for a new house in November 2003 was €221,472, while that paid for a second hand house was €238,386. The equivalent prices in November 2002 were €200,391 and €208,467.