According to the latest house price index from Permanent TSB and the Economic and Social Research Institute the average house price is now at levels not seen since the end of 2002.

The index, from Permanent TSB and the Economic and Social Research Institute, is based on agreed sale prices and is calculated using data from mortgage drawdowns.

It shows that the decline in average house prices was 1.7% in the second three months of this year - the lowest quarterly reduction since the second quarter of 2008.

Overall, the continued fall in house prices is pushing homeowners deeper into negative equity, where mortgages are larger than the value of the home.

The ESRI now estimates that first time buyers who purchased at the peak are on average €90,000 in negative equity, while those who bought since 2003 have lost on average €45,000.

Meanwhile, the Permanent TSB ESRI Price Index also showed that in the first six months of this year, prices fell by 6.4%. The year-on-year decline was 17%. Overall, prices are 35% lower than at their peak at the end of 2006.

The average price for a house nationally in the three months was €201,364, compared to €311,078 at their peak.

In the period, Dublin house prices fell by 3.5%, while house prices outside Dublin fell by 0.8%.

Permanent TSB's Niall O'Grady said today's figures could show that prices are starting to find a more sustainable level after almost three-and-a-half years of decline.