Residential property prices fell in October, bringing an end to a three month upswing in house values.

The Residential Property Price Index, published by the Central Statistics Office, shows that residential property prices were 15.1 per cent lower at the end of last month than at the same point in 2011.

Residential property prices fell by 0.6 per cent in October, following on from rises of 0.2 per cent in July, 0.5 per cent in August and 0.9 per cent in September. The values of such properties have fallen by 8.1 per cent so far this year.

The figures suggest a two-tiered market is operating in the State, with property values outside Dublin down by 0.9 per cent in the month and 8.9 per cent on October 2011.

The market in Dublin continues to be more stable, with house prices falling by 0.2 per cent in the month. House prices in Dublin are 7.8 per cent lower than at the same point last year, with apartment prices 7.1 per cent lower.

The data shows that house prices in Dublin are 55 per cent below the high point recorded in February 2007, with the value of apartments in the city now 63 per cent lower than they were five and a half years ago.

The CSO figures are based on mortgages and do not take into account cash transactions.

Merrion Stockbrokers economist Alan McQuaid said the figures highlighted the fact that consumer confidence regarding the housing market remains fragile. He said the Government "cannot afford to be complacent and needs to tread very carefully" when unveiling any new tax measures in Budget 2013.

"Media reports at the weekend suggest that there are fears in official circles that a property tax combined with the withdrawal of mortgage interest reliefs, will put people off buying a house and kill the tentative recovery in the market that we’ve seen in recent months," he said.

"Indeed, the uncertainty over how a property tax would be imposed may have been a factor in the fall in house prices in October."