AVERAGE HOUSE prices fell by 1 per cent nationally in March and are down by 10 per cent over the year, according to the latest permanent tsb/ESRI house price index.

The average price paid for a house last month was €253,546, compared with €261,573 in December and a peak of €311,078 in March 2007.

House prices in Dublin fell by 1.2 per cent last month, while outside the capital, prices were down 1.1 per cent.

In the first three months of 2009 alone, the value of house prices in Dublin have fallen by 4.6 per cent and 2.6 per cent for the rest of the country.

“Despite improved affordability and six reductions in interest rates, customers’ lack of confidence in the economy results in them staying out of the property market,” said Niall O’Grady, general manager business strategy, permanent tsb.

Over the 12 months to the end of March, house prices were reduced by 14.2 per cent on average in Dublin and 9.9 per cent outside of the capital.

The average price paid for a house in Dublin last month was €334,822 compared with €351,096 in December. Outside of Dublin, the average cost of a house was €218,261, as against €223,984 at the end of last year.

House prices in the commuter counties of Dublin fell by 0.6 per cent in March and by 17.8 per cent in the 12 months to February. In the first three months of 2009 alone house prices in Louth, Meath, Kildare and Wicklow fell by 3.5 per cent. The average price of a house in the commuter counties last month was €257,956, down from €267,265 in December.

House prices for first-time buyers fell by 2.8 per cent in March to €215,440, down from €224,153 at the end of last year. The cost of purchasing a new home fell by 1.9 per cent last month to €256,501 while prices for older houses declined by 0.4 per cent.

In the first three months of 2009, new and existing house prices were reduced by 3.7 per cent and 2.6 per cent respectively.