Rate of house price decline increasing

House prices have fallen by a further 1.5% in the first two months of this year, according to the latest figures from the ESRI and Permanent TSB.

The two organisations say prices fell by a total of 9% in the 12 months to the end of February.

Average national house prices fell by a further 0.8% in February, compared to 0.7% in January.

This indicates some easing in the rate of reduction compared to the final quarter of last year, when the monthly average price change was -1.3% (October), -1.1% (November) and -1.5% (December).

The average price paid for a house nationally in February 2008 was €283,650. This compares to €287,887 in December 2007.

"I think the rate of price decrease over the first two months of the year is lower than many people might have expected which is a positive development," said Niall O'Grady, general manager marketing, Permanent tsb bank.

"We're also seeing evidence that some sellers seem to be finally grasping the point that people are interested in buying properties if the prices sought are realistic so there are more transactions in the market compared to quarter four, 2007."

Dublin house prices fell by 1.1% in February while there was a reduction of 1.3% for houses outside Dublin. In January, the relative price changes were -0.6% and -0.9%.

House prices were reduced by 8.9% and 8.8% in the 12 months to February 2008 in Dublin and Outside Dublin respectively. The equivalent rates to January were 7.7% and 7.6% respectively.

The average price paid for a house in Dublin and outside Dublin in February 2008 was €390,877 and €243,826 respectively.

The equivalent prices in December 2007 were €397,507 and €249,359.