House prices in the Republic of Ireland should pick up during the second half of the year according to Permanent TSB and the ESRI.

However, the Permanent TSB and the ESRI house price index reported average house prices across the country falling by 7.3% in 2007, with Dublin being impacted the most. House prices there fell by 1.4%, compared with those outside the capital which declined by 1%.

House prices for first-time buyer homes fell by 6.5% while the price falls for second-time buyers was sharper at 7.9%. In value, the average cost of a first-time buyer home was €260,784 at the end of 2007, approximately €18,000 less than in 2006.

The survey also reported that by the end of 2007, the average national house price €287,887.

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.