Second-hand property prices show 5.9% increase

Second-hand house prices have returned to the highs of January 2001, according to the latest data from estate agents Sherry FitzGerald.

The average price of a second-hand property in Dublin rose by 5.9 per cent during the first three months, it said.

Second-hand property prices in Ireland rose by 5.5 per cent in the same period, it said, adding that the recovery effectively places house prices back to the level they were at in January 2001.

"The pace of price inflation was even more robust than anticipated during the opening months of 2002, reflecting the restoration of consumer confidence in the performance of the market following the December Budget," said Ms Marian Finnegan, chief economist at Sherry FitzGerald.

"Potential purchasers who had sat on the fence last year have now re-entered the market and are actively seeking property. Overall transactions are up significantly on the same period last year, reflecting the increased consumer interest in the market."

Although first-time buyers have been the most dominant group of purchasers to date, there has also been a notable rise in investors in the market, the company said. As the year progresses, it anticipates the proportion of investors in the market will rise further.

The strength of price inflation in quarter one was underwritten by increases in the starter home and investor end of the market with lower price inflation noted in the mid to upper end of the market, according to Ms Finnegan.

In the year ahead, Ms Finnegan expects the increased turnover of property to ease once the lagged demand from 2001 filters through the market. Increased investor interest would also begin to alleviate the pressure on rental inflation, she added.