House prices in Ireland fell for the seventh month in a row in September, bringing the total decline versus a year earlier to 2.8 per cent, the Permanent TSB/ESRI house price index showed today.

The average price of a house fell 0.3 per cent in September, the same rate as in August.

House prices, which more than quadrupled after a decade of economic boom from the mid 1990s, started falling in March for the first time in five years.

The average price paid for a house in September fell to €299,483 from €300,375 in August and was €8,696 lower than in September 2006.

"The data for September confirms the trend of a modest decline in the overall property market," Niall O'Grady, head of marketing with permanent TSB bank, said in a statement.

There were modest increases in the prices of three-bedroom semidetached properties, however, and no change in the price of new homes. "Anecdotally there is some evidence that the prices of both are being supported by developers including things like add-ons in terms of fit-out," Mr O'Grady added.

The slowdown is being watched closely by investors to see whether the market is still on track for the soft landing predicted by the Central Bank.

They are also watching for signs of spill-over into the broader economy where construction accounted for almost a quarter of the GDP in 2006.