House prices nationally fell by 7.3 per cent last year, with second hand houses in Dublin falling by an average of 9 per cent, according to the latest Permanent TSB/ESRI house price index.
The rate of decline in house prices accelerated in the second half of the year and accounted for 4.7 per cent of the decline, according to the report.
Last year's fall in house price values compares to an average increase 11.8 per cent for house prices in 2006.
According to the report prices for first-time buyer properties (predominately new homes) declined at 6.5 per cent while the price falls for second-time buyers was sharper at 7.9 per cent.
These falls brought the average cost of a first-time buyer property at the end of 2007 to €260,784, some €18,000 less than the same period in 2006.
For the month of December 2007, values dipped by 1.5 per cent, compared with a decline of 1.1 per cent in November. At the end of the year the average price paid for a house nationally was 287,887, a fall of almost €23,000 when compared with December 2006.
House prices in Dublin suffered sharper falls in December, dropping 1.4 per cent, compared with those outside the capital which decline by 1 per per cent.
In the commuter counties of Louth, Meath, Kildare and Wicklow, prices fell by 6.6 per cent during 2007, and 0.8 per cent in December. In 2006, homes in these areas grew by 15.2 per cent.
At the end of 2007 the average price paid for a home in these regions was €321,403, some €23,000 less than the same period in 2006.
Niall O'Grady, Head of Marketing at permanent tsb said the housing market was now "pretty close to where they were at the start of 2006" and claimed that rising rents were evidence that the "fundamentals" in the market were strong.