House prices rose by almost 23 per cent in the first nine months of the year - almost double that for the same period last year, according to new data released yesterday.
It also shows prices in Dublin during that period have grown at a faster rate than in the rest of the country.
However, the data, which is compiled monthly by Irish Permanent, in association with the Economic and Social Research Institute (ESRI), has found that house price in Dublin slowed in September, compared to August, but rose in the rest of the State during the same period.
Property analysts said last night that the rate of price increases had definitely slowed down - especially since September - and that prices have now stabilised. Several said investors were far less active in the residential market since tax breaks were removed on foot of the recommendations of the Bacon Report on property prices.
The Irish Permanent index - which is based on loans given to its customers - showed that house prices grew in Dublin by 29.7 per cent, in the first nine months of 1998 compared to 18.5 per cent in the rest of the State. Irish Permanent claims to advance loans to 20 per cent of the mortgage market.
But the index shows that Dublin house prices rose by just 1.1 per cent in September, compared to a rise of 1.6 per cent in August. By contrast prices grew by 1.8 per cent outside Dublin, compared to a rise of 1.4 per cent in August.
Nationally, second-hand prices rose by 2.4 per cent in September, up from 2.1 per cent the previous month. New house prices fell very slightly - by 0.1 per cent. It was the second month in a row that prices in this sector declined.
"In the year to date, second-hand house prices have expanded at roughly double the pace of new house prices, at 27.8 per cent, as against 13.2 per cent," the study notes.
Although unable to comment directly on the report, analysts said the figures concurred with their own findings.
Ms Annette Hughes, a housing economist with DKM Consultants said the figures were not surprising. "There is still a very strong market out there," she added. Price growth was continuing despite the measures recommended in the Bacon Report. "Many of the recommendations contained in that report deal with the supply side of the market," she said, "and these will not impact for two or three years," she said.
Mr Frank Doonan, residential director with Gunne estate agents, said prices had stabilised. "This is because there is about three times as much product available now as there was at the beginning of, or earlier in the year," he added.
He said a large number of houses are being withdrawn at auction but are selling well afterwards. "This happens in any market where the vendor's expectations go beyond the market level."
Mr Doonan added that the market was now "quite calm and orderly" and houses were selling steadily, either at or slightly below the asking price.
Mr Simon Ensor, residential director with Sherry FitzGerald, said the Irish Permanent's figures were consistent with his own firm's findings. Much of the increases in 1998 had taken place in the earlier part of the year when supply was far more limited. "Prices are increasing but at a much more sensible rate," he added.
He said the Bacon recommendation - now implemented - which meant that investors who bought second properties and let them, could not write off the mortgage interest against the rentable income had affected some sectors, including one and two-bedroom houses.
Mr Paul Newman of Douglas Newman Good said prices had levelled off, and may even have fallen, by as much as 5 per cent in some sectors. However, this would have very little impact on the overall market.
