House price inflation has fallen into single digits for the first time this year, according to the latest Permanent TSB figures. Prices across the State in the 12 months to November rose 9.8 per cent. This time last year, the annual growth rate was 13.8 per cent.

For the second month in succession, prices nationally rose by just 0.3 per cent, just a quarter of the monthly increase in November 2003.

The figures compiled in association with the Economic and Social Research Institute (ESRI) show that the average price for a house nationally was €253,769, up nearly €20,000 on the figure at the end of last year.

Mr Niall O'Grady, head of marketing at Permanent TSB, said there had been a marked slowdown in the rate of house price growth towards the end of the year. He said the slowdown was reflected across all categories of house type and all geographic areas.

"If this continues, it is likely the 2004 growth rate will be just below 9 per cent, slightly below previous predictions," he said. However, he acknowledged the the removal of stamp duty for first-time buyers buying second-hand homes worth up to €317,000 in the Budget might accelerate figures this month.

"It's too early to say exactly how that will impact but there is anecdotal evidence of increased activity among first-time buyers, who have more options open to them," he said.

The impact of the change is also likely to feed into the new year when the market traditionally picks up. Mr O'Grady said Permanent TSB was still confident of house price growth of around 6 or 7 per cent next year - a monthly rate of around 0.5 per cent.

For the first time, the index broke out figures for the performance of the commuter counties - Louth, Meath, Kildare and Wicklow. These showed a fall of half a per cent in prices in November.

"The impact of increased housing supply on house prices is now being felt, particularly in prices in the Dublin Commuter counties," said Mr O'Grady.

In the year to date, property in the commuter counties has risen by 6.5 per cent just under half the 13.2 per cent rate for the first 11 months of 2003.

In November, first-time buyers saw prices fall 1 per cent while existing homeowners paid 0.4 per cent more than a month earlier for property.

The average price of a house for a first-time buyer across the State in November was €221.183, up from €203,125 a year earlier. Second-time purchasers paid an average of €286,476, 10.3 per cent more than 12 months earlier.