THE DECLINE in house prices is accelerating with deepening price cuts in the market as property developers try to clear existing stock, according to the latest Permanent TSB/ESRI house price index.

Average national house prices fell by 1.4 per cent in January. This compares to a 0.9 per cent fall in December. Overall, property prices fell 9.8 per cent in the 12 months to January, increasing from an annualised rate of 9.1 per cent the previous month.

The average price paid for a house nationally in January was €258,006, down from €261,573 in December 2008 and a peak of €311,078 in January 2007.

In Dublin, house prices fell by 1.4 per cent last month alone while there was a 0.6 per cent decline for property bought outside the capital. Over the past year, house prices have declined by 12.4 per cent in Dublin and by 9.9 per cent outside of the city.

The average price paid for a house in the capital in January was €346,274, down from €351,096 in the preceding month. Outside Dublin, property prices fell from €223,984 in December to €222,649 in January.

House prices in the commuter counties around Dublin fell by 0.6 per cent in January to €265,550 from €267,265 in December. For the year, house prices in the commuter belt declined 16.7 per cent, compared with a 16.8 per cent fall in the preceding 12-month period.

First-time buyers experienced a 0.8 per cent dip in house prices for last month to €222,371 from €224,153. Existing homeowners saw prices slipping by 1.9 per cent in January from €296,302 to €290,759.