House prices are still rising but the rate is continuing to slow. First-time buyers even experienced a marginal fall in prices last month, according to the latest Irish Permanent House Price Index.

Nationally, it shows a 16.9 per cent annual increase in May, compared with an 18.4 per cent rise in the same month last year. The index also shows that, between January and May, national house prices rose by 4.5 per cent. This compares to a rise of 8.5 per cent over the same period last year. Nationally, house prices rose by 0.4 of a percentage point in May compared with 1.2 per cent growth in April.

The index, which is compiled in association with the Economic and Social Research Institute, indicated house prices in Dublin rose by 0.5 per cent last month. This is down from 1 per cent in April. Outside Dublin city and county, house prices rose by 0.4 per cent compared with a 1 per cent increase in April. For first-time buyers, prices actually fell by 0.3 per cent compared with an increase of 0.5 per cent rise in April. Second-time buyers saw rises of 1.3 per cent against 1 per cent in April.

The average price paid by a first-time buyer last month was £125,133 (#159,000) up from £106,905 in May 2000.

The index also monitors price movements in new and second-hand housing. Nationally, new house prices experienced no growth compared to a rise of 0.7 per cent for existing houses, still lower than last month's 1 per cent. Between January and May, new house prices rose by 4.4 per cent down from 9.3 per cent. Existing house prices increased by 3.9 per cent compared with 8.4 per cent in the same period last year.

The average price paid for a new house last month was £145,436 ahead of £125,535 in May 2000. Mr Niall O'Grady, head of marketing at Irish Permanent, said the slowing trend was good news particularly for first-time buyers and followed very strong growth over the past four years.