House prices in Dublin rose more than 23% in the last year and are now at their highest level in more than seven years.

The figures are a sign that the Irish economy is finally waking up from the nightmare that saw the country's banks nationalised, mass job losses and a wave of emigration.

Central Statistics Office data shows that residential property prices were up 2% month-on-month in July across the country and 13.4% year on year.

Dublin house prices have been accelerating at a faster pace – up 23.1% year on year and 2.7% in the last month.

The rise has been attributed partly to a combination of lack of supply of housing in Dublin and a shortage of mortgage credit.

Alan McQuaid, economist with stockbroker Merrion Capital, said: "Clearly, there is an element of housing froth at the moment which is pricing many first-time buyers out of the market."

In a sign that the recovery is widening to the rest of the country, where huge ghost estates remain a relic of past excesses, CSO figures show house prices are now 4.9% higher than a year ago.

But house prices across the country are still 42.3% below what they were at their peak, a reflection of the scale of the property crash.

McQuaid said the "improving economic backdrop should help to sustain the house price recovery in the short-term even with limited credit availability".