Index shows average house price now tops €200,000

House prices rose by 10.4 per cent in the year to October, almost double the rate of growth achieved in the same period last year, according to new research. The growth rate of house prices in Dublin and outside Dublin over the year to date were 11.4 per cent and 10.2 per cent respectively

The Permanent TSB house price index - which is compiled in association with the Economic and Social Research Institute - found, the average price of a house in the Republic climbed to more than €200,000 for the first time. When the index first began monitoring house prices in 1996 the average price was €75,000.

Mr Niall O'Grady, general manger at Permanent TSB, said: "Very few people would have predicted double digit growth in the housing market this year after last year's sharp fall off in the rate of growth, yet clearly we are now going to see just that. The key factors behind the figures seem to be the return of investors to the market and strong performance of first-time buyers.

The index shows that prices increased by 1.3 per cent nationally during October. This compared to a rise of 1.5 per cent during September, while in the same month last year, prices fell by 0.8 of a percentage point.

In Dublin, the prices increased by 2.6 per cent compared to a 1.1 per cent rise outside of the capital in October. In the previous month, prices in Dublin rose more slowly at 1.2 per cent with houses in the rest of the State increasing by 1.6 per cent.

The average price paid in Dublin was €262,043 compared with €176,683 elsewhere. In October, 2001 the average price was €240,961 in Dublin and €161,795 in the rest of the Republic.

The price of homes for first-time buyers rose by 1.1 per cent with the increase for second-time purchasers up 1.2 per cent. For the month of October, the price of second-hand houses was up 1.4 per cent, while new houses increased in price by 1.7 per cent.

In the year to the end of October, the index has recorded a 6.4 per cent increase in the price of new houses and a 13 per cent increase in second-hand houses.

Esate agent Sherry FitzGerald is the latest company to take advantage of depressed markets to buy its own shares. The group purchased 7,184 at a price of €1.20 on Monday and a further 100,000 yesterday at €1.23. The shares will be cancelled, the company said yesterday.