House prices slow for tenth month in a row

House price growth slowed for the 10th consecutive month in October, the latest house price index shows.

The Irish Permanent index found that house prices across the State rose by 10.1 per cent year-on-year last month compared with growth of 12.1 per cent in the 12 months to September.

October's rate is the lowest year-on-year figure recorded by the house price index since it started in 1998.

Irish Permanent, which compiles the index in association with the Economic and Social Research Institute (ESRI), said the latest edition supported the view that house prices were rising at very moderate levels.

It found that house prices rose by just 5.7 per cent in the 10 months to end-October, compared to a 16.5 per cent increase over the same period last year. In October of this year alone, house prices were down by 0.8 per cent after growing by 1.0 per cent in October 2000.

A geographical breakdown showed that house prices in Dublin rose by 6.9 per cent in the year to date, compared to 19.2 per cent last year. In October, Dublin house prices were down by 0.9 per cent after rising by 1.7 per cent in the same month last year.

Prices outside Dublin city and county rose by 6.1 per cent in the first 10 months of the year, down from 16.3 per cent in 2000. In October, prices were down by 1.2 per cent after rising by 0.9 per cent a year earlier.

The average price paid for a house in Dublin in October was £189,772 (€240,961) while the price outside Dublin was £127,424.

The survey suggests that the increase in house prices in Dublin is based on the lower end of the market, with the average price per square foot for houses worth less than £300,000 increasing by 5.7 per cent in the year to date.

By contrast - for Dublin houses in the £300,000-plus bracket - the average price per square foot has fallen by 8 per cent.

Prices for first-time buyers fell by 1.2 per cent in October, while second-time buyers saw price falls of 0.4 per cent. This compared with increases of 1.5 per cent and 0.7 per cent respectively last year.

The average price paid by a first-time buyer last month was £128,433 compared to £115,990 in October 2000. The price of new houses increased by 0.3 per cent in October, the same rate of growth as in October last year.