Dáil Éireann - Volume 525 - 26 October, 2000

Written Answers. - House Prices.

Mr. Durkan Mr. Durkan

114. Mr. Durkan asked the Minister for Finance if he or his Department have quantified the precise impact of house prices on the current level of inflation; and if he will make a statement on the matter. [23724/00]

Mr. McCreevy Mr. McCreevy

Minister for Finance (Mr. McCreevy): The Irish Consumer Price Index, CPI, includes a component for the mortgage interest cost of purchasing a dwelling. This reflects the increasing cost of houses and the impact of changes in interest rates.

177

[177] Mortgage interest costs make up 3.63% of the total CPI. In the year to September 2000 these costs increased by 31.7%, contributing about 0.8% to the headline inflation rate of 6.2%. The increase of 31.7% was due to both higher house prices and the increase in interest rates by the European Central Bank from 2.5% in November 1999 to the current rate of 4.75%.

A breakdown of the increase in mortgage costs between changes in interest rates and in house prices is not readily available.

Question No. 115 taken with Question No. 22.

Dáil Éireann 525 Written Answers. House Prices.

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