The price of second-hand property in Dublin fell in the third quarter of 2001, according to two property surveys released yesterday.

A third survey by the Irish Permanent has indicated that the rate of increase in national house prices is moderating.

Estate agents Sherry FitzGerald said the average price of a second-hand property in Dublin fell by 4 per cent during the period. This comes on the back of a relatively stagnant period of price growth during the first half of the year, resulting in an overall price reduction of around 4 per cent during the first nine months of 2001, it said.

"The results of the barometer reflect the impact of a reduction in consumer confidence in the performance of the market.

"It is a temporary phenomenon and we remain confident that the fundamentals underpinning the market will allow it to re-stabilise," said Ms Marian Finnegan, economist with Sherry FitzGerald.

Meanwhile, estate agents Douglas Newman Good released the results of its quarterly house price gauge, which showed that second-hand residential property in Dublin dropped by an average of 2.8 per cent during the third quarter. The average price paid for a second-hand house fell from £211,813 (€269,139) to £205,847, continuing the slowdown from the second quarter, it said.

Property in all areas of Dublin experienced a fall in prices during the third quarter, ranging from an average of 1.8 per cent to the west of the city, up to 3.7 per cent for property on the southside, Douglas Newman Good said. The increased fall on the southside reflected the higher value composition of housing, which has experienced the largest softening of prices, it said.

Both agents blamed Government intervention in the market last year - with the introduction of stamp duty - for the loss in consumer confidence and for the impact on prices of second-hand property.

"The upper stamp duty rate of 9 per cent is having a serious negative impact on this sector of the market and has certainly contributed to its weaker-than-average performance over the last six months," said Mr Paul Murgatroyd, economist with Douglas Newman Good.

"As a result, properties valued above £500,000 have witnessed a decline of 4.6 per cent while houses in the £200,000 to £250,000 bracket have experienced a fall of nearly 4.8 per cent during the last quarter, as owner-occupiers purchasing second-hand houses shy away from the applicable higher stamp duty rates."

Confidence has been further eroded by fears of a slowdown in the international environment, both estate agents said.

The latest edition of the Irish Permanent house price index has indicated that year-on-year growth in national house prices has slowed for the ninth consecutive month. It fell from 12.8 per cent in August to 12.1 per cent in September - the lowest year-on-year rise since the index started.

In the year to date, national house prices rose by 6.6 per cent, compared to a rise of 15.3 per cent over the same period last year.

Across the State, house prices actually fell by 0.2 per cent in September, compared with growth of 0.5 per cent in September 2000 - the first time there has been a decrease in the monthly rate since 1996.