House prices for standard three bedroom homes have fallen by up to six per cent in parts of Dublin, according to a new survey of property sales.

A house price index compiled by Real Estate Alliance (REA)  shows that the price of a three bed semi-detached has risen by just 1.3% nationwide in the first three months of 2015.

Nationally, the average semi-detached house now costs 187,000 euro, according to the survey.

REA Chief Executive Philip Farrell said: “There is an acute lack of supply of three-bedroom family homes because it is still not financially viable in many areas for builders to construct homes and make a profit.

“In areas where the average value is below €200,000, supply of new homes will remain reduced due to profitability issues for developers who need houses to sell for above that mark.

“This is caused by the current high cost of construction and exacerbated by the significant taxes which are payable on a new home (around 28% of the cost) and the recently increased building regulations.

“Until the costs of building are lowered, or the market takes a jump, we are looking at being unable to satisfy the demand that exists in the market.”

The REA further estimates that high costs of building new homes is a “major threat” to the health of a property market that has only recently returned to normal.

The average house has risen by just 1.32%, or €7,005 over the December 2014 figure of €184,713 – and the lack of a supply of suitable housing is a feature of the market across the country.