It's official - house price rises are slowing down and the annual rate in 1999 is likely to have been less than 20 per cent.

According to official Department of the Environment data for the first three quarters of 1999, the rate of price increase slowed significantly over 1999 to 16.4 per cent at the end of September.

That is expected to remain below 20 per cent when the official figures are released next month for the entire year.

This contrasts with figures released by estate agent Sherry FitzGerald last week in which house price inflation in 1999 was found to be 26.4 per cent.

The Sherry FitzGerald data, however, are based on a sample of 239 homes around Dublin while the Department of the Environment figures include every home sale.

Ms Marion Finnegan, economist at Sherry FitzGerald, said she was expecting house prices to rise by some 20 per cent over 2000.

But others think the rise may be closer to 15 per cent or below.

Mr Jim Power, chief economist at Bank of Ireland, warned that expectations of further increases of 20 per cent would leave the market in a serious crisis within 12 months.

"I would be extremely concerned about a housing bubble," he said.

He expects house prices to rise by 12 per cent during 2000. And, according to NCB research, they are likely to rise by some 15 per cent this year.

Planning permissions have risen significantly, as have home bond indicators.

And sources point to the likely 48,000 homes which will be built this year as well as the extra initiatives to bring extra land into supply.

Rising interest rates this year may also take some of the steam out of the market as they may cause buyers to think harder about levels of indebtedness.

However, according to Mr Eunan King, economist at NCB, the rise is unlikely to be too much and will hardly dent the housing market in Ireland.

Most commentators expect interest rates to rise about one percentage point this year to 4 per cent.

Mr King also pointed out that continuing very strong growth in the labour force as immigration and female participation both rise will support prices.

At the same time, the declining size of households and rising real personal disposable income would also be very supportive of the housing market, he noted.