Irish property prices fell by -3.5% in the fourth quarter of 2010, up from the -1.3% decline witnessed in the third quarter and -1.7% in Q2 2010, research from think-tank Economic & Social Research Institute and Permanent TSB bank has discovered.

Prices declined by an average of -10.8% in 2010, reaching levels not seen since the second quarter of 2002 and down -38% since the peak at the end of 2006. In 2009, property prices fell by -18.5%, according to the data.

The average price paid for a property nationally in the fourth quarter of 2010 was €191,776, compared with €215,086 in the same period last year and €311,078 at their peak.

Permanent TSB general manager Niall OGrady reported: ‘With low transaction volumes, continuing price declines, and a sluggish economy, the outlook is for a very subdued property and mortgage market in 2011.’

Price falls in Dublin were much lower, down -0.6% in the fourth quarter, which is less than the -1.2% fall reported for Q3 2010. However, the average price fall for 2010 as a whole in Dublin was -15.1%, after a fall of -23.4% in 2009.

Outside Dublin, house prices decreased -2.9% during the final three months of 2010, following a -1.2% reduction in the previous quarter. Prices fell -8.1% for the full year 2010 versus a -15.6% decline in 2009