House price growth almost at standstill

The slowdown in house prices looks set to continue, with the rate of increase falling to a virtual standstill as prices reach their peak, with prices falling slightly in the Dublin commuter counties.

According to new research from Permanent TSB and the Economic and Social Research Institute (ESRI) there was a 0.1% increase in house prices nationally in January, unchanged from November and December.

Niall O'Grady, head of marketing at Permanent TSB said: ' The rate of price rises is now very moderate. This is highlighted by the fact that in the six months to January this year, national prices rose by just 2.6%.'

He said :'This gives a clear picture of current trends and potential annual growth in 2007.'

He said that house prices have been climbing for the last ten years and a slowdown was inevitable as prices reached an affordability break.

He also pointed out that higher interest rates were slowing prices, and also some buyers have held off purchasing homes in January in anticipation of changes in stamp duty, as nobody wants to be the last to pay it.

The annual rate of growth in the year to January was 10.6%, down from 11.8% in the 12 months to December.

The average price paid for a house in the State last month was €311,078, compared to €310,632 in December.

In Dublin house prices grew 14.7% in the year to January, and outside the capital, rose 9.7%.

The equivalent rates to December 2006 were 15.9% in Dublin and 10.9% elsewhere.

The average price paid for a house was €427,946 in Dublin and €267,484 outside Dublin last month.

The price of a house in the commuter counties of Louth, Meath, Kildare and Wicklow fell by 0.1% to €309,006, compared to a fall of 0.6% in December.

On a national basis new and second hand house prices grew by 9% to €304,161 and 9.1% to €312,484 respectively year on year to January.