Rate of house price decline doubled last year

House prices last year fell by more than double the figure recorded in 2008, it was revealed today.

According to the latest Permanent TSB/ESRI House Price Index, house prices fell by 18.5% last year.

Nationally prices are back to April 2003 levels, down 31.5% since the height of the boom in 2007.

The index also reveals that average national house prices declined 3.6% in December, compared to reductions in November (-3.1%), October (-1.8%) and September 2009 (-1.1%).

The average price for a house nationally in December 2009 was €213,183, compared with €261,573 in December 2008 and a peak of €311,078 in February 2007.

Commenting on the results, Niall O'Grady, general manager business strategy, permanent tsb said: "2009 was a horrendous year for the Irish housing market with a combination of shattered confidence, significant oversupply and a weakening economy combining in a vicious circle.

"The figures deteriorated as the year progressed with an 8.5% reduction in average prices in quarter 4 - more that twice the pace of decline of any other quarter since the fall commenced.

"The pessimist will say there's worse to come. The optimist will argue that affordability has improved so much that things will stabilise soon. But the realist will admit we'll have to wait and see."

Dublin house prices fell by 4.3% in December while there was a reduction of 2.5% for houses outside Dublin.

In November, the relative price changes were -0.4% and -2.6%.

In 2009, house prices were down by 20.6% and 15.3% in Dublin and outside Dublin respectively.

The equivalent rates in 2008 were reductions of 11.7% and 10.2% respectively.

The average price for a house in Dublin and outside Dublin in December

2009 was €278,767 and €189,643 respectively.

The equivalent prices in December 2008 were €351,096 and €223,984.