Bernard J. Durkan
Question: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]
Written Answers. - House Prices.
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.
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.