Property prices fell 3.2% in the fourth quarter of 2010, bringing the fall for the year to 13.1%, according to the latest Property Barometer issued by leading property website, MyHome.ie.

The latest fall brings the total decline from the peak of the market in late 2006 to 34.6%.

Based on average mix-adjusted asking prices, the average price for a home nationally is now €271K compared to €280K three months ago and €312K twelve months ago.

In Dublin, asking prices overall fell by 3.4% bringing the total fall over the last 12 months to just under 15.2%. Prices in the capital have now fallen by 41.2% since their peak. The average asking price for a house in Dublin now stands at €314K down from €325K in Q3 and €370K twelve months ago.

The author of the report, Annette Hughes, Director DKM Economic Consultants said it is clear that consumer sentiment remains fragile heading into 2011.

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"Although prices are back to 2002 levels it is clear we have not yet reached the bottom of the market. Confidence in the market remains weak as accessing credit remains difficult for some potential house buyers. Other issues which will continue to adversely impact the market include the amount of unsold and vacant housing stock and the precarious financial position of some households following the December budget combined with the need to repay debt," Hughes said.

However Hughes also pointed out that with affordability now back to mid 1990 levels some of those who were priced out of the market during the boom years may be enticed back into the market during 2011.

The Managing Director of MyHome.ie, Angela Keegan said while it was clear 2010 had been a very challenging year for the property market, the decline in asking prices had not been as severe as in 2009.

The survey shows that overall the prices for new homes fell by about the same as second hand homes, 3.4% as against 3.2%. The average price of a new home now stands at €246K while that of a second hand home is €274K.

Limerick city, recorded the biggest price fall compared to Cork and Galway, with a decline of 7%, bringing the median asking price in the city to €200K. Overall asking prices fell by 17.5% during 2010.

In Cork the median price fell by 5.7% to €250K, while in Galway the fall was 2.3% giving a median price of €249K. At the peak of the market the median price in Galway was €450K and since then prices have fallen by just under 45%, the most dramatic fall recorded in urban areas.

(CD)