House prices down a fifth in two years

House prices have fallen by almost a fifth since the property bubble peaked in March 2007, the latest review of the market revealed today.

Average prices are now back to levels not paid since the housing boom was in full swing in November 2004.

According to the permanent tsb/Economic and Social Research Institute (ESRI) study, prices paid last month are down 18.5% in the last two years.

Niall O'Grady, general manager with permanent tsb, said there was a lack of confidence in the market.

"Despite improved affordability and six reductions in interest rates, customers' lack of confidence in the economy results in them staying out of the property market," he said.

The survey records prices paid last month on deals which may have struck at the turn of the year and it showed;

:: Average price is €253,546, compared to a peak of €311,078 in March 2007.

:: In the last 12 months prices are down 10%.

:: Dublin property has slumped 14.2% in the last year to an average of €334,822.

:: Outside of Dublin house prices fell 9.9% since March last year to €218,261.

The research also showed that commuter counties have been hardest hit by the slump in the property market. Prices in towns in Meath, Kildare and Wicklow are down 17.9% in the last 12 months alone with the average price now €257,956.