A report from the Sunday Independent. "Back in February, we published a report compiled by the Institute of Professional Auctioneers and Valuers (IPAV) that showed the first signs of a slowdown in house price inflation in Dublin. In August, the CSO's monthly index of house prices showed increases in the city were cooling off, dropping from 11.4pc last June down to 8.4pc year on year. Now the latest report from IPAV, published yesterday, shows that Dublin house prices in the city's most expensive areas have not only peaked but fallen dramatically in the first six months of the year."

"The price drops were recorded in seven of 14 Dublin areas, and were hardest hit in the city's most exclusive postcodes, such as D4 and D2, but also affected more affordable areas such as D14 and D15. In Dublin 4, for example, the average price drop for a four-bed semi was €150,000, bringing the average cost down from €1,375,000 to €1,225,000."

"However, a two tier market continues nationwide - with house prices in other areas, including the commuter belt and parts of north and south county Dublin, still rising. Prices in some of the wider commuter belt counties have increased by up to 18pc as they play catch-up with those of the capital, highlighting the distances buyers are prepared to commute to find houses they can afford."

"'There has definitely been a correction in different parts of the city,' comments Pat Davitt, chief executive of IPAV, 'The market is able to allow for a correction to take place,' he points out, 'which a normal working market should actually be able to do.'"

"He suggests that further price corrections may still be going on. 'I'd say the Dublin market is a market that is working well. I'd say the market in the country is still dysfunctional.'"

"Diving a little deeper into the figures shows that leafy Dublin 4 has been worst hit as prices for four-bed semis dropped by 12.24pc, to an average of €1,225,000, three-beds fell by 2pc to an average price of €967,500. A similar trend is seen in Dublin 2 where the price tag for a four-bed semi fell by 11pc, a drop of €100,000; three-beds also saw prices fall, while two-bed apartments rose slightly by almost 2.5pc. However, Dublin 4, 2 and 6 were still the most expensive parts of the city in which to buy any type of property."

"Other areas where values have fallen significantly include Dublin 15, where a number of large new developments came to market over the past 18 months, including Hamilton Park and Fairhaven. Here values fell by 10.11pc for four-bed semis to an average of €445,000. Dublin 14, which includes upmarket Churchtown where Hazelbrook Square and Park Developments' Fernbank apartments launched earlier this year, also saw price drops of an average of €65,000 or 9.49pc, bringing the amount a buyer could expect to pay for a four-bed home to €685,000."

"Davitt comments that 'in some of the areas that we see the biggest drops, we see supply coming on the market.'"

"In fact, the latest figures from the CSO show that 14,446 houses were built in 2017, and 7,909 in the first six months of this year. While these figures falls far short of demand, which has been estimated somewhere between 30,000 and 50,000 a year, the arrival of new homes to market is clearly beginning to have an impact on price."

"It's likely too that the Central Bank's tighter lending rules are taking effect, putting a ceiling on the amount that buyers can borrow, and having a knock on effect on prices. According to John McCartney, director of research at Savills, 'Mortgage finance is taut. My understanding is that a number of banks have exhausted the number of their exemptions already.' These exemptions typically allow a buyer to access a loan for 4.5 times their income but banks are restricted in the percentage of loans they can allocate to each category of buyer, with only 5pc allocated to first-time buyers, and 20pc of second and subsequent buyers."

"Despite dramatic price falls in higher-end properties in the city, there is little sign of a property crash. This time round, the Central Bank rules are having a moderating effect, and the outlook is for price stabilisation as more supply arrives. Commenting on the market in general, John McCartney of Savills says: 'In a sense, there is nothing unexpected happening. Strong house price inflation will slow further in the year, we think it will be at 5-6pc by the time we get to the end of the year. At some point the gap between supply and demand will close and that will bring more moderate price inflation. It's nothing sinister.'"