ASKING PRICES for houses and apartments fell 4.2 per cent in the first three months of 2009, according to the latest report on the market by property website Daft.ie.

The drop in prices is the eighth consecutive quarter in which prices have fallen.

The national average asking price now stands at €281,000, almost €64,000 or 18 per cent lower than the peak in asking prices recorded in mid-2007.

The decline brings the residential market back to levels last seen in September 2005. On an annual basis, asking prices have declined 16.3 per cent.

The declines in asking prices varied from region to region, with Dublin city centre being the hardest hit, the Daft report shows.

Prices in the centre of the capital fell by 11 per cent in the first three months of the year compared with the fourth quarter of 2008, as first-time buyers continued to shy away from the falling market despite a series of interest rate cuts from the European Central Bank. The average asking price in Dublin city centre was €318,751, according to information collated from properties posted for sale on Daft.ie.

In Sligo and Waterford city, prices fell by 10.5 per cent and 9.5 per cent respectively, while in Cork city and Limerick city, prices dropped about 5 per cent.

“Sellers discounted their prices by a further €12,500 on average in the first three months of 2009,” said Daft.ie economist Ronan Lyons.

“People selling properties in Dublin cut their prices by over €20,000, indicating that a larger adjustment in property prices is under way in the capital than elsewhere,” he said.

By measuring asking prices – a measure of sellers’ expectations – the Daft house price report differs from the Permanent TSB / Economic and Social Research Institute (ESRI) house price index, which uses actual selling prices.

A glut of unsold properties, the result of a surge in housing developments in recent years, continues to make it a buyer’s market.

But Mr Lyons said that although the oversupply of properties remained “significant”, with more than 60,000 homes for sale across the State, he added it was an “encouraging sign” that the stock of property available for sale had fallen 5 per cent from its peak in October 2008.