New figures show that falls in house prices accelerated last month, with a particularly sharp fall in house prices for first-time buyers.

The house price index, compiled by Permanent TSB and the ESRI, fell by 1.9% in April, the biggest monthly drop since the index started in 1996. Prices fell at an annual rate of 10.7% in April, up from 10% in March.

The average prices of a house last month was €248,640, down almost €13,000 or 5% from the figure at the end of last year. This brings prices back to levels not seen since the summer months in 2004. The peak, according to the index, was €311,078 in February 2007.

House prices for first-time buyers dropped by 4.1% in April from March. Permanent TSB's Niall O'Grady said this reflected their reluctance to buy in a market which was still declining, and where prices of unsold properties were being cut further. Prices for second-time buyers were down 0.8% in the month.

He also said that he expects house prices nationally to continue falling to 2001/2002 levels.
He said it was difficult to predict when house prices would bottom out, but he expected house prices to fall to the level they were at in the 'early days of the turn of the century'.

He said that would represent a peak-to-trough fall in prices of around 30% from their February 2007 level, the high point of the property market.

Today's index reveals that house prices in Dublin fell by 1.1% in April, while the fall was 1.7% for houses outside Dublin. House prices in the commuter countries around the capital fell by 1.4% in the month. New house prices were down 2.6% in the month, while prices of existing houses fell by 1.5%.

The survey is based on the agreed sale price and is calculated using figures from mortgage drawdowns. The index is a three-month moving average. The compilers point out that there may be a time lag between the time the sale price is agreed and when the mortgage is drawn down.