House prices are still rising, but the rate of increase continues to slow, new data released yesterday have shown.

The figures show that prices rose by 12.8 per cent for the first nine months of the year compared to 23.2 per cent for the same period last year.

Analysts say the slowdown - which has seen the annual rate of increase slow every month this year - is partly attributable to the increased supply of housing on the market. The index, compiled by Irish Permanent, found that house prices - on a monthly basis - grew by 1.3 per cent, compared to 1.6 per cent between July and August.

The index shows that for the first time since Irish Permanent started compiling this data the annual rate of increase (September 1998-September 1999) outside Dublin is higher than in the capital. House prices in the rest of the State grew by 19.9 per cent in the 12 months to September, compared to 17.7 per cent in Dublin.

Both the slowdown in house prices and the difference between the increases in property in Dublin and elsewhere, is shown most dramatically by the following: between the third quarter of last year and the third quarter of this year, second-hand house prices grew by 21.1 per cent outside Dublin, compared to 16.3 per cent in the capital.

During the same period last year prices grew by 41.8 per cent in Dublin, but by only 22.8 per cent in the rest of the country.

New house prices rose by 13.4 per cent and second-hand houses by 13 per cent in the first nine months of this year, according to the figures. This compares to a 17.5 per cent rise in second-hand and 28 per cent rise in new house prices for the same period last year.

The annual percentage increase was also down - from 18.9 per cent in the 12 months to August, to 18.8 per cent in the 12 months to September. The index says the average price paid for a new home in September 1999 was £109,982 -an increase of 1.9 per cent on a national basis. Second-hand house prices increased by 1.3 per cent in September.

Between August and September, price growth for second-time buyers, at 2.4 per cent, exceeded that for first-time buyers (0.9 per cent). Irish Permanent said the average price paid by a first-time buyer in September was £93,593.

Irish Permanent economist Ms Jane Kelly said the averages were reached using a statistical procedure which takes into account the various types of houses and the areas they are in, rather than dividing the total amount paid by the number of houses sold.

Ms Kelly was unable to give a forecast for house prices for the remainder of the year. However, she pointed out that the rate of growth had peaked in 1998 and had slowed down every month this year.

The index is compiled by Irish Permanent, which advances almost one in four home loans, in association with the Economic and Social Research Institute.

The trend in the Permanent Index is in line with that found by the Department of the Environment, which conducts a quarterly survey. Its most recent survey was for the three months to the end of June. It showed continued moderation in new house prices, which increased by 1 per cent nationally and 2.6 per cent in Dublin.

The Department's quarterly survey to the end of September is due next month. A Department spokesman said that, since the implementation of measures advocated in the Bacon Report - which examined the rise in property prices - there had been a steady tailing off in the rate of house price increases.

The spokesman said the rate of increase was now lower than had been for a number of years. He said the provision of funding to local authorities to provide more water and sewerage facilities had also helped to encourage house-building.