House prices static in February, survey shows

National house prices failed to show any growth in February, the latest Permanent tsb/ESRI House Price Index has revealed.

The static growth followed growth of just 0.1 per cent in November, December and January, while in the six months to the end of February national property prices grew by only 1.6 per cent.

Year on year, the national growth rate fell from 10.6 per cent to the end of January 2007, to 9.5 per cent in February. Prices in some sectors of the market actually fell slightly.

There were regional variations, with Dublin still leading the way in house price growth.

The average house price in Ireland now stands at €311,078, compared to €310,632 in December 2006. In Dublin, the average house cost €428,850, while outside the capital this cost was €267,293.

In February, house prices in the capital grew by 0.2 per cent, while there was a reduction in prices of 0.1 per cent for houses bought outside Dublin.

In the 12 months to February 2007, prices rose by 13.2 per cent and 8.7 per cent in Dublin and outside Dublin respectively. This followed rates in January 2007 of 14.7 per cent and 9.7 per cent respectively.

In the commuter counties of Louth, Meath, Kildare and Wicklow, house prices fell 0.9 per cent in February, compared to 0.1 per cent the month previously. Year-on-year growth stands at 10.6 per cent, compared with compared with 12.9 per cent in the 12 months to January 2007.

"The housing market is clearly in a period of price realignment, with very moderate price growth the most likely outcome this year. Clearly stamp duty uncertainty in advance of the election is a factor as is recent rises to interest rates," said Niall O'Grady of Permanent tsb bank said.

"It's difficult to imagine much momentum coming back into the market until the stamp duty issue is resolved after the election."

Second-time buyers enjoyed lower prices in February, with the survey indicating a fall of 0.4 per cent. The cost borne by first-time buyers remained unchanged, however. Year on year, these sectors showed growth of 9.2 per cent and 10.2 per cent respectively.

A first-time buyer now pays an average of €279,399 for a house - just €300 more than in December 2006 - while second-time buyers pay €348,709 instead of €349,213.

Prices for new properties continued to rise, showing 0.7 per cent growth in February, but second-hand prices fell by 0.1 per cent. This compares to 0.5 per cent growth and a fall of 0.1 per cent respectively in January.

Year on year, the price growth rate reached 8.1 per cent in the second-hand market, and 8.9 per cent for new homes.