Figures provided by the Reception and Integration Agency (RIA) show 4,425 people, including 708 families, were living in the State’s 33 direct provision centres around the country at the end of 2016 — 271 fewer than in 2015.
However, the cost of accommodating asylum seekers last year still rose by 12.4% to almost €64.2m.
According to the RIA the number of new asylum seekers accommodated in direct provision centres dropped significantly, down from 2,828 in 2015 to 1,748 last year — a decrease of 38%.
Around 500 refugees who arrived in Ireland in 2016 did not apply for accommodation, while approximately 1,700 moved out of the centres. More than 57,480 have now been housed in direct provision centres since the system was established in 1999.
Eugene Banks, a RIA spokesperson, said the commencement last December of the International Protection Act, which allows for a single application procedure, would significantly speed up decisions on asylum and by extension reduce the length of time spent in direct provision accommodation.
Mr Banks said the RIA had also begun implementing a key recommendation of the McMahon Report, which reviewed the operation of direct provision centres by providing arrangements for home cooking for families.
He said work had also started on structural changes and improvements to centres with regard to fire safety, building regulation, and planning issues.
Pakistan remained the country of origin for the biggest number of new asylum seekers in Ireland last year, followed by Nigeria, Zimbabwe, Albania, and the Democratic Republic of Congo.