The pace of the rise in house prices nationally has begun to slow-down. The latest Irish Permanent Index shows that the growth in national house prices slowed to 1.4 per cent between July and August, below the previous increase of 2.7 per cent. The figures represent the lowest monthly increase in house prices since December 1997.

The slow-down results from a levelling off in new house prices with analysts now predicting prices may have begun to stabilise in September.

According to the index, house prices grew by 20.3 per cent between January and August, compared with increases of 9.8 per cent in the same period last year. During that time, house prices growth in Dublin moved into line with the average rate of growth seen outside of the capital.

But in the year to the end of August prices in Dublin significantly outpaced those elsewhere. In August an annual percentage increase of 39.7 per cent was recorded in the capital against 22 per cent outside Dublin.