The research shows house-price inflation, which tapered off dramatically towards the end of 2001, followed a slow upward trend for most of last year. A surge in price growth came over the final months of 2002, culminating in a 13.3 percent rise in December.
Permanent TSB general manager iall O’Grady singled out investor activity and “enthusiasm” among first-time buyers as the key drivers behind overall property inflation. Industry estimates suggest that investors account for about one-fifth of new mortgages.
O’Grady believes the strong price growth recorded in the latter months of 2002 will be maintained in early 2003, resulting in annual inflation in “high single digits” by the end of the year. New homes are likely to rise in price at a slower rate than second-hand properties, O’Grady said.
A similar forecast came yesterday from estate agents Douglas Newman Good, which said the average second-hand property in Dublin would rise in value by 8-10 per cent this year.