House prices have declined by 4.7% in the last 12 months, according to the latest Permanent TSB/ESRI house price index which describes the market as 'sluggish' and 'cautious'.
The index, published today, says that house prices nationally fell by 1.3% in October - the eight fall in a row. This compares to a fall of 0.3% in September.
The average price paid for a house in October was €295,469 compared to €309,963 the same time last year.
'There's little surprise in the figures for October which confirm that there was little spark in the market during the traditionally strong autumn selling season,' commented Niall O'Grady, Head of Marketing at Permanent TSB.
'Clearly potential purchasers remain cautious and demand is sluggish. Deferral of purchase decisions is now beginning to impact on the rental sector where rents are rising steadily in response to strong demand,' he adds.
The index also reveals that Dublin house prices declined by 0.4% last month, with prices outside of Dublin falling by 1.3%. In the 12 months to the end of October, house prices declined by 4.8% in Dublin and by 4.9% outside Dublin.
House prices in the commuter counties of Dublin - Louth, Meath, Kildare and Wicklow - decreased by 0.1% in October and are down 5.5% for the year.
Reacting to the decline, Goodbody Stockbrokers said: 'The monthly movement is the largest such decline since the index began in 1996.
'Goodbody recently predicted prices would fall by five per cent in 2007. It has now revised that figure to 7% to take account of today's figures.'
Davy Stockbrokers welcomed the decline, saying it was just what the housing market needed.
The firm's research arm said that sellers, who had been holding out for 2006 prices, are accepting the reality of the current situation and dropping their asking prices.
