House prices will grow by 1-2% in the first half of 2007, according to a study by permanent tsb and the Economic and Social Research Institute.
Figures show significant decline in the rate of increase compared to 2006 when prices increased by almost 12%.
The permanent tsb/ESRI house price index shows house prices across the country rose by 11.8% last year, a faster rate than the 9.3% recorded in 2005.
But it also shows that prices fell in a number of categories of the market in December.
Growth slowed sharply in the second half of the year - to 3.8% compared with 8% in the first half.
A breakdown showed that Co Leitrim recorded the highest rate of growth in 2006 at 29%, though this was from a small sample.
Dublin's rate was 15.9%, while prices increased by only 6% in Co Sligo.
House prices rose by 0.1% in the month of December, the same increase as in November.
The average price paid for a house in the month was €310,632.
Permanent tsb's Niall O'Grady said the pattern of slower growth in the second half was likely to continue.
He said he expected average price growth of 3% to 6% this year.
A breakdown of the December figures showed that Dublin house prices increased by 0.1%, but prices outside Dublin fell 0.1%.
Prices for first-time buyers dropped by 0.2%, while for second-time buyers the fall was 0.1%.
The annual increase for first-time buyers was 11.8%, while it was 12.2% for second-time buyers.
New house prices increased by 0.3% in December, while second-hand prices were unchanged, giving growth rates for the year of 9.6% and 10.2% respectively.
