HOUSE prices plummeted by more than 7pc last year -- wiping €24,000 off the value of the average house.

New figures published yesterday reveal the average price of a house nationally has now fallen to around €288,000.

And economists last night warned that house prices would experience an annual drop of up to 15pc if they continued to fall at this level.

The figures by the Economic and Social Research Institute (ESRI) and Permanent TSB also show second-hand house prices fell almost 10pc across the country last year.

But the price of new houses was not as dramatic. New homes fell in price by 4pc, due mainly to what housing market experts said were artificial price supports.

Developers of new housing units have been offering free white goods, tiling and other incentives rather than dropping prices in an attempt to entice buyers.

Only in the past three weeks have some developers started to cut as much as €100,000 off the prices of some apartments in a bid to stimulate the market.

However, some economists said yesterday that current housing prices could have fallen by even more than 7pc as the ESRI/Permanent TSB figures reflected house price transactions from two to three months ago. This means the 7pc fall in house prices reflects property market activity from last autumn.

Meanwhile, figures released yesterday by the Central Bank showed that the growth in lending for residential mortgages was at its lowest level in 12 years in 2007.

Mortgages

An additional €1.4bn in mortgages were transacted in December to take the total owed in mortgages to almost €140bn.

This was a rise of 13.4pc for last year, compared with a rise of 24.2pc a year earlier.

The overall rate of lending across the economy last year was the slowest in five years. This followed a record year in 2006.

The annual rate of growth of all lending, including mortgages, business loans and personal loans, was 17pc.

Credit-card holders splashed out on €1.3bn worth of goods and services on their plastic in December, the Central Bank figures show. This was a whopping €81m more than last year, but consumers paid off €1.2bn of their credit card debt.

Non-mortgage lending grew by 21pc last year, down 10pc on 2006, with the Central Bank attributing this to a slowdown in lending to the construction and property sectors.

The bank also said the total amount of credit card debt was 9.3pc higher than a year earlier. It said growth rates had fallen sharply during the year, probably because SSIA money was used to repay debt.