The average house price in the Irish Republic has now fallen to levels not seen since the end of 2002, according to the latest figures.

The house price index from Permanent TSB and the Economic and Social Research Institute, published this week, revealed the decline in average house prices was 1.7% in the second quarter of this year - the lowest quarterly reduction since the second quarter of 2008.

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Dublin house prices fell by 3.5% over the same period compared to a reduction in the first Quarter of 10.3% and a reduction of 7.5% in Quarter four of last year.

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.

Commenting on the figures Niall O' Grady, General Manager of Permanent TSB, said: "While prices continue to fall at different levels in Dublin versus the rest of the country, this reduction in Quarter two is the lowest recorded quarterly fall in almost two years.

"This may indicate that prices are starting to find a more sustainable level after almost three and a half years of decline."

(BMcC/KMcA)