The rate of growth in house prices slowed for the third month in a row in July. The latest Permanent TSB/ESRI house price index says that house prices grew nationally by 1.1% last month. This compares to a rate of growth of 1.2% in June and 1.6% in May.
However, the index says that the rate of growth so far this year has still been higher than expected with prices countrywide in the first seven months of 2006 rising by 9.1% compared to a figure of 3.3% the same time last year.
Over the past 12 months, the growth in national house prices was 15.4%. This was more than twice the rate recorded in the 12 months to July 2005 (6.2%). The average price paid for a house nationally in July was €303,274.
'It is clearly too early to reach any definitive views as to what impact the recent series of interest rate rises will have on house price inflation, but these figures will give support to those who believe that the rise in rates will lead to a reduction in the rate of price growth,' commented Niall O'Grady, Head of Marketing at Permanent TSB.
He added that some sectors of the housing market have seen strong increases during the month, so the picture varies quite significantly from sector to sector.
'Overall most people will agree that the rate of price growth in the year to date has been surprising. In that context, I believe that a cooling of prices would be welcomed across the country,' Mr O'Grady said.
Today's index reveals that Dublin house prices rose by 1.6% in July, while those outside the city were up by 1.2%. House prices grew by 16.8% and 15.7% in the 12 months to July 2006 in Dublin and outside of Dublin respectively. The equivalent rates to the end of June were 16.1% and 15.2%.
The average price paid for a house in Dublin was €408,959 in July, while an average house down the country cost €262,142. The equivalent prices at the start of the year were €368,576 and €240,201.
The index reports that house prices for first time and second time buyers rose by 1.3% and 1.1% respectively last month. In June the figures were 1.7% and 1.3%.
House prices grew by 16.3% and 15.8% year on year to July for first time and second time buyers. In the first seven months of the year, growth rates for first time and second time buyers were 9% and 9.7% respectively, while growth rates this time last year were 5.6% and 2.6%.
Prices for new and existing houses grew by 1.3% and 1.1% in July, compared to figures of 0.9% and 1.1% in June. New and second hand house prices grew by 14% and 13% respectively year on year to July. This compares to growth rates of 13.7% and 12.3% in the 12 months to June.
