Irish house price growth has risen at more than twice the rate in the five months to November at 5.4pc.

The latest permanent tsb/ESRI House price index reports that the price increase is up compared to the first half of 2005, when price growth was at 2.6pc.

Despite a recent interest rate rise by the European Central Bank, enthuasism in the Irish house market continues.

The overall value of house prices nationally rose by 8.0% in the first eleven months of 2005. This is slightly down compared to 8.4pc recorded over the same period in 2004.

But whilst this growth figure is down, the rate of price increase towards the end of 2005 is accelerating. At the end of 2004, price growth was slowing down.

First time buyers see the largest growth in prices, with the year-to-date growth figure at 12.2%. First time buyers are paying an average price of E248,113 for their homes.

The report also said that the average house in Ireland now costs E274,507.

Niall O’Grady, head of Marketing at Permanent TSB said: “This has certainly been a year of two halves with price growth strengthening considerably as the year went on.

Looking ahead to the year end, we now anticipate that price growth for the year will come in at around 9%, slightly higher than that recorded last year (8.6%).”

Mr O’Grady said he expects that price growth in the New Year will continue at similar levels to that seen this year. He says that prices will be buoyed by continuing strong demand and strong employment growth.

“The recent interest rate rise and the potential for further rate rises may impact to some degree as the year goes on, though there is no need to suggest that this will have any dramatic impact on demand for the foreseeable future” he added.