House prices increased by 1.4 per cent in April, as housing commencements fell to their lowest levels in 18 months, according to the AIB's latest Housing Market bulletin.

April was the ninth successive month in which house prices increased by more than 1 per cent, the bulletin reports, and the price of an average house is now 13.2 per cent more expensive than a year ago.

The bulletin contains mixed signals with housing registrations, which precede commencements, rising annually by 9.5 per cent in the month.

Commenting on the fall in the number of units commenced, AIB chief economist John Beggs said it was too early to predict a downturn in housing construction.

"We don't have a time series of sufficient length to fully understand the link between registrations, commencements and completions," he said.

"The limited data we have would suggest commencements are more volatile so we're not putting up a red flag on this one," Mr Begg said yesterday.

While predicting house price inflation to average 12 per cent for the full year, and stating that there would be "no let up" in house price inflation in the immediate future, Mr Begg said longer-term factors could moderate activity in the sector thereafter.

"With the expected rise in interest rates, the sharp rise in house prices relative to incomes which has clearly led to a deterioration in affordability, coupled with this information on commencements, suggests that we're not far from the top."

More than 250,000 workers are employed in the construction sector, according to the Central Statistics's Office (CSO) latest Quarterly National Household survey of the labour market.