House prices have fallen 1.5% in the first two months of this year according to the latest edition of the Permanent TSB and ESRI House Price Index.

Average national house prices fell by a further 0.8% in February following a similar reduction of 0.7% in January.

The figures indicate some easing in the rate of reduction compared to the final quarter of last year, when the monthly average price change was -1.3% [October], -1.1% [November] and -1.5% [December].

The average price paid for a house nationally in February 2008 was €283,650, compared to €287,887 in December 2007.

General Manager Marketing at Permanent TSB, Niall O'Grady said: "I think the rate of price decrease over the first two months of the year is lower than many people might have expected which is a positive development.

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"We're also seeing evidence that some sellers seem to be finally grasping the point that people are interested in buying properties if the prices sought are realistic so there are more transactions in the market compared to quarter 4 2007."

Dublin house prices fell by 1.1% in February while there was a reduction of 1.3% for houses outside Dublin. In January the relative price changes were -0.6% and -0.9%.

House prices in the commuter counties of Dublin fell by 1.0% in February 2008, while the reduction in January was 0.8%. A year on year reduction to February 2008 in the Commuter counties of 7.4% compares with 7.3% in this category over the 12 months to January.

House prices for first-time and second-time buyers were reduced by 1.0% and 0.4% respectively in February 2008. In January the equivalent rates showed reductions of 1.4% and 0.7%.

House prices for new and second-hand houses were reduced by 0.4% each in February 2008. In January the relative price reductions were 0.4% and 0.1% for new and second hand houses.

New and second hand house prices fell by 6.0% and 9.3% respectively year on year to February 2008. The equivalent rates of growth to January were 5.0% and 9.0% respectively.

(VB/JM)