HOUSE PRICES continued to fall in the second three months of the year, dipping almost 3.5 per cent to an average of €291,000, figures released at the weekend show.

Predictions from Permanent TSB/ESRI and international ratings agency Moody’s show that Irish property prices are generally expected to fall by up to 45 per cent from the peak they hit three years ago. This indicates that overall this year, values could drop by 12 per cent to 15 per cent.

Figures released by property website Myhome.ie show the trend continued in the second quarter. Prices fell by 3.4 per cent during the three-month period, and by 7 per cent in the year to date.

The annual decrease, from the end of June last year to the same time this year, shows houses are worth 13.7 per cent less than they were 12 months ago.

Overall values are now 30 per cent less than at the peak of the market at the beginning of 2007.

The average house now costs €291,278. New houses cost an average of €259,845, and fell 4.3 per cent between the end of March and the end of June. Second-hand properties cost €295,697, a fall of 3.3 per cent. In Dublin, the average house costs €339,598.

As with other similar surveys, Myhome.ie finds the fall in Dublin was sharper than elsewhere. The decrease in Dublin was 4.52 per cent for the second quarter, and 17 per cent annually. Homes in Dublin are worth 36 per cent less than at their peak in 2007.

The sharp fall in Dublin partly reflects the fact that prices in the capital climbed higher and at a faster rate than in the country as a whole during the property boom, and so have further to fall.

According to independent economic consultant Paul Murgatroyd, who contributed to the study, new and second-hand values have fallen by about 30 per cent from their 2007 peak.

The sharp fall in the value of new homes, 4.3 per cent, compared to the more or less average fall in second-hand prices of 3.3 per cent, was due to the fact that the banks sold off a number of apartments during the period.

At the same time, the study finds first-time buyers are looking for larger and cheaper properties as starter homes, and are less likely to favour apartments.

Mr Murgatroyd says signs of stability are coming into some parts of the market. Myhome.ie managing director Angela Keegan says there are some encouraging signs of stability, particularly for three-bed homes in Dublin.