House prices are likely to rise by just 5 per cent this year, according to one of the State's largest mortgage lenders.
Permanent TSB's projection came as monthly figures showed another appreciable slowing in the rate of house price inflation. Figures for April indicate that, overall, residential property prices have risen 6.5 per cent over the past year, almost half the 12.9 per cent annualised rate at the same point in 2004 and down a full percentage point from the 7.5 per cent rate in March.
On a monthly basis, prices rose just 0.3 per cent in April, just a quarter of the rise a year previously. The average price of a house nationally last month was €257,560, almost €16,000 ahead of the €241.692 average in April 2004.
Prices have been falling consistently since last September when the annual rate stood at 12 per cent.
Niall O'Grady, head of marketing at Permanent TSB, said that while some sectors were faring better than others, "overall price trends would suggest that 2005 will close with an annual national house price growth in the region of 5 per cent".
"Over the first four months of this year, we have seen consistent modest house price growth nationally with record low year-to-date growth rates registered," he said.
The survey, compiled by the mortgage lender in association with the Economic and Social Research Institute (ESRI), also discovered that first-time buyers are less inclined to buy new homes than had previously been thought.
An analysis of the April figures indicates that more than half of first-time buyers (55 per cent) bought existing property rather than new homes. A random review of data from the last 12 months points to a figure closer to 40 per cent, still seen by the authors as higher than expected.
Prices in Dublin lagged those elsewhere in April - 0.3 per cent compared to 04. per cent. However, on an annual basis, Dublin homes are 7.7 per cent more expensive with prices rising 5.3 per cent elsewhere.
The average price in Dublin is now €340,850 against €223,030 in other parts of the State.
New house prices rose by 0.6 per cent in April, twice the rate for existing property and reversing the trend this time last year.
