Official figures show a sharp drop in the number of loans approved for house purchases in the first three months of 2007.

The latest housing statistics bulletin from the Department of Environment said the 24,500 loans approved represented a drop of nearly 22% compared with the same period last year. The value of these loans was down 16.4% at €6.4 billion.

The bulletin shows that the average price of a new house was €320,969, up 9% on a year earlier. The average second-hand house price was also up 9% at €379,874.

But the figures show that average price for a house approved for a loan in Dublin was flat compared with the last quarter of 2006.

The Department also said 38,978 new homes were completed and 31,600 started in the first half of the year. The completion figure represents a sharp drop from the 43,899 in the same period last year, when a record 93,000 homes were built.

'Figures contained within this release confirm that the housing market is evolving to a more balanced and sustainable growth pattern, particularly with regard to house prices and mortgage lending,' said Minister for Housing Batt O'Keeffe.