PROPERTY prices jumped in Dublin in January to record their first annual rise in more than five years.
It means that the average cost of a home in the capital is now €191,000 – 2.1pc higher than it was a year ago.
However, there was a fall in house prices in the rest of the country, according to the latest figures from the Central Statistics Office.
Prices nationally dropped by 0.6pc in January, leaving them 3.3pc lower than a year before.
Analysts said the fall in prices nationally recorded in January was less than previous decreases. This points to a stabilisation in the market, particularly in larger towns and cities, experts said.
House prices in Dublin are 54pc lower than at their highest level in early 2007, while the fall in the price of residential properties in the rest of Ireland is 47pc.
Overall, the national index is 50pc lower than it was when the market peaked.
Davy economist David McNamara said the first annual rise in Dublin property prices reflected the lack of supply in many Dublin areas, particularly for family homes.
But he questioned the accuracy of the CSO index as it does not take account of cash sales.
A number of property experts estimate that cash transactions may account for up to 40pc of current sales.
Estate agents Lisney said cash buyers were snapping up the better properties, meaning prices were likely to be stronger than the CSO index was picking up.
Mr McNamara said: "The index remains an unreliable estimate of prices until such time as cash transactions are included."
A lack of repossessions by the banks of properties where the mortgages are not being paid is creating a shortage of supply and pushing up rents, he said.
Merrion economist Alan McQuaid said it was difficult to make a call on the housing market at this stage.
"But we think any overall drop in prices in 2013, if at all, is likely to be in low single digits after the 12.6pc fall in 2012," he said.
The figures provided by the CSO only capture sales prices based on mortgages advanced by nine lenders.
The statisticians are assessing the impact of cash sales and may amend the index in the coming months.
Property experts said the ending of mortgage tax relief in December meant there was a rush to buy before Christmas and a fall-off after that.
This had distorted prices at the start of the year.
Lisney head of research Aoife Brennan predicted that prices in Dublin would continue to rise this year due to a lack of houses to buy.
But prices in the rest of the country were likely to continue to fall.
Meanwhile, 841 people were approved for mortgages in January.
This was up from the same month last year, but a fall from the December figure, according to the Irish Banking Federation.