Research by the Society of Chartered Surveyors confirms that property remains one of the most lucrative investments.

In the third quarter of 1998, its research show returns remained strong at 8 per cent. While profits recorded on transactions undertaken during the quarter and the successful completion of a handful of developments improved returns to property investors by a further 0.3 of a percentage point.

During that three-months, market values continued their upwards trend, rising by 6.4 per cent, on the back of a 3.6 per cent uplift in rental values and a 0.2 of a percentage point reduction in yields.

Irish property yields have now topped 8 per cent three times in the last four quarters, producing an annual return of 35.4 per cent at the end of September, according to the Society.

The rate of return on retail property was virtually unchanged from the previous quarter at 7.9 per cent and rental growth in this sector slowed to 3.1 per cent. Despite this modest set back capital growth remained strong at 6.3 per cent, driven mainly by a 0.19 of a percentage point reduction in yields.

Offices maintained their lead as the strongest performing sector, with a return of 8.5 per cent, albeit down on the previous quarter.

The slowdown in the rate of return was due to a similar fall in capital growth from 8.4 per cent in June to 7 per cent over the three months to the end of September.