House prices in Dublin fell by 10 per cent on average in 2007 to wipe out gains made in 2006, according to the Irish Auctioneers and Valuers' Institute (IAVI).
Robert Ganly
The report by the IAVI also said that second-hand apartments fared worse than second-hand houses, with falls of up to 17 per cent, and that 40,000 apartments are vacant in the capital.
The IAVI expressed concern that prices have "someway to correct before activity is restored and prices are stabilised".
The report found that prices began to fall last February and that excessive price expectations, the rising burden of stamp duty and the tone of media comment all affected the market.
However, the IAVI said that property prices would not drop as much in 2008 predicting further average price falls of around 4.1 per cent in Dublin and falls of around 3 per cent in the rest of the country.
IAVI president Robert Ganly said the results of the survey made for tough reading but did show that the worst of the current difficulties in the market had passed.
"We are able to predict that prices will fall in 2008, but not by nearly as much as they did in 2007. This levelling off should begin to reverse itself in early 2009, and we would hope to see the property market growing again some time during that year.
"Overall, I would say to people that the market is beginning to stabilise. The worst is over," said Mr Ganly.