The huge money and growing value of every householder's equity highlights why it's so important to make the right decision about a property purchase.

The two reports, from leading new homes agents Hooke & MacDonald and from rental website daft. ie analyse why prices are once again moving up so sharply.

The property market is now worth over 500bn, and according to both Hooke & MacDonald and daft. ie, strong price inflation is likely to continue right through to 2007, possibly pushing the price of the average house through the 400,000 mark.

Hooke&MacDonald firmly points the finger of blame for high prices in Dublin at the shortfall of new houses being built in the capital but says that the pundits of doom who say it will all end in tears with a property crash have got their sums wrong.

"The Irish residential property market is on course for a period of sustained growth that will last for the foreseeable future, " the report states.

"It is soundly based, driven by the record levels of employment creation, the thriving economy and the consequent population expansion."

So who's buying? What's driving prices up? Where are properties appreciating fastest, and why?

Here are 25 things you should know before you buy to ensure that your property purchase ends in tears of joy rather than disappointment.

1The average price of a new home in Dublin could rise by as much as 14% in 2006, according to Hooke & MacDonald. "While this does not signal a return to the days of excessive price increases observed during the late 1990s, " it says, "this trend is unlikely to continue over the long-term and a return to single digit growth rates of between 5-8% is desirable."

2The average price of a house in Dublin at the end of 2005 was 369,000, according the Permanent-TSB house price index. Over half the new homes bought in Dublin in 2005 cost under 350,000, and about 30% were less than 300,000 3Look back 10 years and you get a much clearer picture of why demand for housing is so huge and why we're prepared to pay so much. The population has grown by more than half a million, and the number of people at work by 650,0000; economic growth averaged 7% per annum; unemployment fell from 12% to 4%; and average household incomes almost doubled in real terms.

On the supply side, 550,000 new homes were built, increasing housing stock by almost one-third and the average price of a house trebled from 78,0000 to 275,0000.

4Location has a huge bearing on price. It's an obvious point, but one often ignored in the hunt for a bargain. Being close to transport and amenities will result in above-average price growth, so if you're on the Luas, Dart, a good commuter train service or close to the M50 in Dublin, the value of your house will grow at a faster pace than in the outer suburbs, serviced by buses.

Proximity to good shops, schools and town centre facilities is also a huge advantage.

5Address is a big factor: Dublin 3, 4, 6, 7 and 8, as well as south Co Dublin are all highly sought-after because of the wealth of beautiful period properties in these suburbs . . .

which are, by their nature, limited in supply. There is also very little new development in these older established areas.

The impact of good supply is tangible. Where lots of houses are being built, they are also more affordable.

In north Dublin, 91% of new homes were less than 350,000 and 63% were less than 300,000, while in west Dublin, 73% of all new homes bought cost less than 350,000 and 53% were under 300,000.

Prices in these areas will grow at a slower pace than elsewhere.

6Areas of Dublin tipped to experience exceptional demand and building in the next couple of years include the Docklands, Heuston/ South Circular Road, Belcamp, Baldoyle, Portmarnock, Castleknock, Adamstown, Citywest, Rathfarnham, Sandyford and Cherrywood.

All these areas have got, or are getting, good infrastructure and transport links.

7Hooke & MacDonald argue we urgently need an integrated plan that covers both housing and transport to take account of population growth and prevent rampant urban sprawl and worsening gridlock.

8Analysis of figures published by the Department of Environment Heritage and Local Government shows that prices in Dublin are 40% higher than in Cork, 33% higher than in Galway, 81 % higher than in Limerick and 68% higher than in Waterford.

This substantial differential between prices in Dublin and the Republic's other major cities has only emerged within the last 10 years.

Higher levels of employment and earnings in the capital go some of the way to explaining this, but the limited housing supply in Dublin is considered the main factor.

9Demand is huge and supply, while balanced in some cities, is still well short of what's needed in Dublin.

10 The population will rise to some 4.5 million by 2010 and about 5 million by 2015.

Hooke and MacDonald reckons demand for new homes nationally will rise from 92,000 this year, to an incredible 101,000 in 2008 . . . which is twice as high as previous forecasts for this timeframe.

Even though we're outbuilding almost every other European country and are likely to complete 85,000-plus new homes this year, we are simply not keeping up with demand.

11 There's a big supply problem in Dublin, relative to demand.

Demand is currently running at 26,000 units per year and could increase to 31,000 in the next two years, creating a shortfall of 8,000 units this year, rising to 10,000 by 2008.

New builds in Dublin last year accounted for only 21% of the national total, even though 30% of the population lives in the capital.

12 Housing suply in Dublin is patchy, with plenty of new homes being built in the Fingal council area and West Dublin, but a huge shortfall in South Co Dublin and Dun Laoghaire- Rathdown, and high prices resulting in areas of scarcity.

Overall, the number of planning permits fell by 45% last year, from 24,196 in 2004 to just 13,233 in 2005.

New home starts fell by 16%, with the biggest gaps in Dublin city centre and South Dublin.

Hooke & MacDonald has claimed that An Bord Pleanala bears much of the responsibility, since the planning appeals board has reversed an average of one in three decisions granted by local authorities.

The board, for its part, refers to design flaws in many of the schemes.

It wants larger developments to include a mix of dual aspect apartments, smaller townhouses and larger family homes so that they can support sustainable communities.

13 First-time buyers account for 48% of new homes purchased. Other home owners make up 24%, while investors buy 28% of new homes.

14 There has been a marked increase in the past year in the number of foreign nationals buying their own homes. Many who arrive in Ireland want to make it their permanent home, so inward migration is affecting both rental and purchase prices.

Hooke & MacDonald's figures show that foreign nationals now make up 10% of all buyers, and that proportion is growing steadily.

15A massive 30% of first-time buyers get parental help, either in the form of a lump sum (which can be as much as 20,000) or in the shape of parents acting as guarantors on part of the mortgage 16In Cork city, a record 10,000 new homes are being built this year. There are expected to be 5,000 completions in Galway (where prices are highest in relation to average earnings) and 3,000 new units in Limerick.

17 Based on current planning policies, there is only enough land 'between the canals' in Dublin city centre to supply six years' of anticipated housing demand, according to Hooke &MacDonald.

18 Though housing densities have risen in urban areas, our need to build and pattern of development is such that we continue to promote urban sprawl, with the traffic chaos that results. Hooke and MacDonald argue that we must urgently allow for highrise schemes in key city locations, especially in Dublin.

19 Rents rose by 4.6% in Dublin last year, according to the rental website daft. ie. They are expected to grow by 5% in Dublin city centre this year, and by another 6% in 2007.

The current average rent for a quality one-bed apartment in Dublin city centre is 950 per month. A two-bed averages 1,300 a month.

20 Popular new rental areas in Dublin are in areas with good transport links or where huge amenities are being built, such as Dundrum and Sandyford, Smithfield and the Docklands.

Santry and Ballymun, where no rental market existed before, is emerging as a strong rental area thanks to the regeneration of the area, apartment construction, tax breaks and the prospect of the giant IKEA store in the area.

21 It can take as long as four years for a scheme to be completed, from the initital stage of buying land through applying for planning permission to the design, construction and sales stages.

22 Alhough interest rates are rising, they are still very low.

Most financial analysts reckon the European Central Bank will level rates off at around 3.5% rather than at the more pessimistic estimates of 4%. Rising incomes are likely to offset any rise in mortgage repayments.

23 For home owners on a variable rate mortgage, monthly repayments on a 250,0000 loan will increase by about 32 for every one-quarter percent rise in rates on a 25year loan term, or 128 per month for every full percentage rate increase.

24Buying a property off the plans allows home buyers to save for as long as two years before drawing down a mortgage, allowing first-time buyers, in particular, to save for the balance of the deposit and legal fees.

With many larger schemes, developers are now asking for deposits well below the usual standard 10%. In some cases, the requirement is for around 10,000 on signing contracts.

25 Gross mortgage lending is expected to rise by a massive 26% to 43bn this year, up from 34 bn in 2005.

Some 27 bn is expected for home buying, while another 16 billion is expected will take the form of equity release and remortgaging for home improvements, and buying second homes abroad.