PROPERTY: House prices have risen for the first time in six months according to the latest Permanent tsb survey. The monthly increase has been attributed in large part to the favourable tax treatment for property investors announced by the Minister for Finance, Mr McCreevy, in his December Budget. The rise was more pronounced outside Dublin.
Nationally, prices rose by 0.7 per cent in February, well ahead of the 0.4 per cent at which they climbed in the same month last year.
The monthly figures have lifted the annual growth rate from 2.4 per cent in January - the lowest since the survey began in 1998 - to 2.6 per cent. However, it is still well short of the 19.8 per cent annual growth rate recorded in February 2001.
Prices for first-time buyers remained unchanged on the month with second-time buyers facing a 0.9 per cent increase.
The Permanent tsb house price index is compiled in association with the Economic and Social Research Institute, and is based on mortgage loans approved by the bank, which says it accounts for more than a quarter of new mortgages sold in Ireland.
The rise in the annual rate of growth is the first in more than a year.
Mr Niall O'Grady, general manager of marketing at Permanent tsb, said the results gave the first indication that the anecdotal evidence of increasing market activity following Budget measures seen as favouring property investors was feeding through to increased prices.
"While the increase recorded is not exceptional in its own right, it does support the view that the downward pressure on house prices, which characterised 2001, has halted - at least for the moment."
He said further increases were likely in the coming months.
Mr Tom Day of Lisney said the index was encouraging, with increased activity being most noticeable in properties valued at up to €500,000.
"Property prices are likely to continue to grow throughout 2002 but in low single digits rather than the double-digit rate we saw in recent years," he said.
Prices in Dublin rose by 0.3 per cent last month, with houses outside the capital fetching 0.7 per cent more than in January. The average price paid for a house in Dublin in February was €234,689 compared to €159,898 in the rest of the State.
The survey shows that the lower end of the market has been the main driver of prices over the past 12 months, with prices per square foot for houses selling below €380,000 in Dublin rising by 10.1 per cent while the price per square foot on houses selling above this figure accelerated by just 3.6 per cent.
The cost of second-hand homes rose faster than that of new homes, climbing 1.2 per cent in the month compared to 0.7 per cent. The average price paid for a new house in February was €187,060, still ahead of the €182,129 figure for existing property.
