House prices rose by 7.3 per cent in the 12 months to October as demand for homes continued to outstrip supply.

The headline rate was down from 7.5 per cent the previous month but still well ahead of average wage growth, meaning the purchasing power of buyers continues to be squeezed.

The latest residential property price index, compiled by the Central Statistics Office (CSO), indicated that house prices in Dublin rose by 5.4 per cent in annual terms in October while those outside Dublin jumped by 8.9 per cent.

“While the almost static rate of house price growth will offer some relief to aspiring buyers, house prices still remain unaffordable for many,” said Trevor Grant, chairperson of Irish Mortgage Advisors.

“There needs to be a considerable and consistent fallback in the rate of house price growth if home ownership is to come within reach of the so many who are vying to get onto the property ladder.”

The median price or middle value of a dwelling purchased in the 12 months to October was €381,000. The highest median price paid for properties was in Dún Laoghaire-Rathdown at €675,000 while the lowest was €190,000 in Donegal.

The CSO said its national index, measuring house price changes, reached the value of 202.3 in October. That is 23.7 per cent above its Celtic Tiger peak in April 2007.

Dublin residential property prices are 8.9 per cent higher than their February 2007 peak, while residential property prices in the rest of the State are 26.2 per cent higher than their May 2007 peak, it said.

“Today’s figures confirm what we are seeing on the ground. Prices continue to rise, particularly outside Dublin, reflecting the demand that is being felt right across the country,” Mike Stack, solicitor and co-founder of property start-up Beam, said.

“But these figures alone mask a deeper issue. Too many transactions are collapsing or dragging on for months, eroding buyer confidence and placing vendors at risk of renegotiations or lost sales,” Mr Stack said.

“Around 15 per cent of deals fall through, and nearly a third of these failures are caused by last-minute planning, compliance or title issues that could have been addressed earlier,” he said.