HOUSE PRICES in Ireland continued to fall in March with the average property now worth 8.9 per cent less than a year ago, according to figures from Permanent TSB and the Economic and Social Research Institute.

In March alone, prices nationally slipped by 0.7 per cent, following falls of 0.8 per cent in February and 0.7 per cent in January. As a result, property prices are now on average 2.2 per cent weaker than at the end of last year.

However, the pace of the decline has slowed from the fourth quarter of last year, when prices recorded a 3.9 per cent fall.

The average price paid for a property nationally in March was €281,643, down more than €27,500 from at the same time last year. Permanent TSB's general manager for marketing, Niall O'Grady, said the figures "confirm the continuing softening in both house prices and transaction numbers across the spectrum as the market moves to more realistic levels of affordability".

"The data also clearly shows that sellers who are targeting first-time buyers have adjusted their prices very significantly in an attempt to reignite demand," he added. First-time buyers have seen average prices tumble by 10.2 per cent in the past year. Existing homeowners have experienced an 8.8 per cent fall in prices.

Yesterday's figures revealed the continuing strong demand for medium-sized semi-detached homes. The index reported a slight increase (0.2 per cent) in prices for three-bedroom semis in March - the only sector to report a gain. Separate figures published yesterday showed house prices in the UK falling 4.2 per cent in the first quarter of 2008 and 3.7 per cent since April last year - the most significant fall in 15 years.

The data from Halifax showed the annual rate of house-price inflation in Northern Ireland now stands at 3.5 per cent, while the average price of a house is £214,266 (€274,297) - 10 per cent above the UK average of £194,893.