Househunters were today warned they face a balancing act in getting on to the property ladder as a new house price survey showed signs of a slowdown, the first for five years.

Estate agents Douglas Newman Good revealed that rising interest rates were helping to create the much touted soft landing in the market, but at the same time creating added costs for first-time buyers.

Backing a separate study by umbrella group the Irish Auctioneers and Valuers Institute, DNG reported the rate of house price growth was on the way down - a trend not seen since 2001 when prices fell due to 9/11 and the technology bubble bursting.

The survey showed the average price of a second-hand house in Dublin rose by 7.4% between April and June this year - compared to a 10% rise in the first quarter of the year.

Paul Murgatroyd, DNG economist, said: “We do seem to be moving into a period of soft landing. The downturn, everything will be fine scenario we have been hearing about, it looks like it is coming to fruition.

“We are moving into a soft landing and stabilising of house price growth, but certainly there is no crash or big dip.

“The balances of power are shifting back to the buyer from the vendor slightly but the downside is that there is the double-edged sword of raising increased sums to fund the buying and paying back loans.”

Mr Murgatroyd also warned that first time buyers sat on their hands in 2001 expecting prices to keep on falling but in the first quarter of 2002 prices saw a 6.5% rise, making up all the ground that was lost in the previous year.

The IVAI said that the property market is finally beginning to cool and some homes are even seeing a drop in prices for the first time in more than a decade but they also dismissed any prospect of a crash.

Posted: 07|9|06 at 9:00 pm. Filed under: Property & Land.