House price increases have continued to moderate, with a rise of 1.2 per cent in May compared to 1.4 per cent in April, according to the latest Irish Permenant House price index.

The year-on-year percentage increase for May slowed to 25.1 per cent, from a peak of 29.8 per cent in December 1998.

The index, which is compiled in association with the Economic & Social Research Institute, showed that since the start of the year prices have expanded by 5.9 per cent compared to 9.9 per cent for the same period last year.

Prices paid by first- time buyers rose by 0.6 per cent in May but the average price paid by a first-time buyer was £87,426 compared with £71,033 at the same time last year, a year-on-year rise of 23.1 per cent. Second-time buyers' prices increased by 1.9 per cent in May. In a reversal of trends of previous months, prices outside Dublin rose quicker than in the capital in May, at 1.9 per cent as against 0.6 per cent, while in the year-to-date prices in Dublin increased by 6.5 per cent compared to 5.8 per cent in the rest of the Republic.

Nationally there was little change in May in prices for new houses with an increase of 0.3 per cent from 1.3 per cent in April.