The average national price of a second-hand house fell by 1.9% during the first quarter of 2008, according to estate agents Sherry FitzGerald.

The figures - published today - reveal a slight reprieve in the rate of price decline when compared to a price reduction of 2.4% in the final quarter of 2007. The results for the twelve months to March show a price reduction of 7.5%.

This moderation was largely led by the Dublin market where the results for quarter one show price deflation of 1.4%, compared to 2.7% in the final quarter of 2007. This brings the price deflation in Dublin to 9.2% for the twelve to March 2008.

In contrast, an analysis of the price performance in Ireland - but excluding the Dublin market - shows price reductions of 2.4% in the quarter and 5.7% in the year to end quarter one 2008.

Marian Finnegan, Chief Economist, Sherry FitzGerald Group said: "The results for the price barometer show a definable reprieve in the pace of price deflation in the Dublin second-hand market.

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"The first evidence of an improvement in market conditions came in autumn 2007 with an uplift in internet activity and viewing levels. This trend was further underwritten following the amendment in the treatment of stamp duty announced on December 5th with a notable rebound in transaction levels thereafter," Ms Finnegan added.

An analysis of the purchaser profile in the first quarter of the year reveals that first time buyers bought approximately 31% of the properties traded in that period, compared to 34% during the same period in 2007. Investors were less active in the first quarter than of 2008 purchasing 12% if the properties traded in the period, compared to 21% in the first quarter of 2007.

The trend of strong rental inflation moderated somewhat in the opening months of 2008 with the CPI index of privately owned rents rising by 9.23% in the twelve months to February 2008, compared to an annual average growth of 10.98% in 2007.

Looking to the future Ms Finnegan said 2007 was undoubtedly a difficult year for the property market but the outlook for 2008 is somewhat brighter.

She said: "The combination of amendments in Budget 2008, greater certainty in the interest rate environment and a reduction in the supply of new homes on the market will facilitate a more stable year in 2008. That said we do not anticipate an immediate revival in price performance, rather a gradual improvement in market sentiment and demand trends."

(VB/JM)