The average asking price for properties in Cork city fell a further 1.7% in the years second quarter bringing the year-on-year change to a total of - 8.4%.

These latest figures, published by property website Daft.ie, show that the average asking price is now €40,000 lower than it was in Cork in late 2007, compared to an average national price falls of 7.9%.

The key factors attributed to this further decline in house prices, according to the report, are rocketing oil-prices which have severely affected the cost benefit, and subsequently consumer confidence in long-term commuting and its quality of life.

Other factors cited the tightening by lending institutions of their mortgage criteria in recent months with an increasing number of potential buyers now finding it difficult to secure credit. A recent series of increases in variable mortgage interest rates since the Spring, with many institutions increasing the cost of tracker mortgage products, has also had a substantial impact along with the current negative climate surrounding the market which has dented consumer confidence.

However, despite the drastic fall, with house prices declining in every county over the past year and the negative connotations of the recent Daft.ie report, Fergal O'Brien, Senior Economist, Irish Business & Employers Confederation (IBEC) says there are reasons to be optimistic.

"Overall I remain very positive on the medium-term outlook for the Irish economy. Once the current housing correction is behind us and international credit markets return to some form of normality, the evidence supporting the ESRI view of near 4% trend growth in the economy is compelling," he said.

"The housing market correction is already well advanced as housing starts have reacted swiftly to over-supply and stock levels in much of the country could clear fairly rapidly once confidence returns to the market. I suspect we will hear a few more terror inducing headlines from Anne Doyle before the end of this year but as we look into 2009 a moderation in world oil prices and subsequent reductions in ECB interest rates could be the kick-start that the Irish housing market desperately needs," he added.

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