HOUSE prices fell back last year to levels last seen in 2003 but the rate of decline is slowing down, new figures reveal.

Throughout the country prices dropped by more than 20pc last year, according to estate agent Sherry FitzGerald.

However, the group said the first indications the market is moving toward a more stable period are beginning to emerge.

In Dublin the average price of a second-hand property fell by 4pc in the final quarter, bringing the total drop in the capital in the year to 21.5pc. The comparable figure for the national market saw a similar fall in the final quarter bringing the total drop to 20.2pc.

In Cork, prices fell by 3.9pc in the final quarter of 2009, bringing the results for the year to minus 20.2pc.

Peak

The latest figures show that from the peak of the market in 2006, Dublin house prices have fallen in real terms by 45.7pc while the national market has corrected by 40.2pc.

"This in effect means that prices in Dublin are back at levels achieved in quarter three of 2003 while prices nationwide are back where they were in quarter two of 2003."

Sherry FitzGerald said it was notable that first-time buyers bought 55pc of the properties traded compared to only 38pc during the same period in 2008 with 93pc of the homes transacted in the market purchased by owner-occupiers.

Commenting on the figures, Sherry FitzGerald chief economist Marian Finnegan said the pace of price correction had moderated notably from the beginning of the year.

In the first quarter house prices in Dublin and nationally fell by 9.5pc and 8.3pc respectively. This compared with price deflation of 4pc in both regions during the final quarter.

"There is no doubt that the opening months of 2010 will bring its own challenges, particularly as consumers digest the implications of the Budget," she said.

"However, the first indications that the market is moving toward a more stable period are emerging."

IRISH INDEPENDENT, Fergus Black

If you have any comments on this subject we would be delighted to hear them.