THE NUMBER of unsold new homes in the Republic stands at 35,000, according to industry figures released yesterday.

The Construction Industry Federation (CIF) released the results of a sector-wide survey of the new homes market which were at odds with recent estimates of the backlog of new houses in the State, which had put the figure at 50,000.

The federation dismissed this yesterday and said that its study indicates the volume of unsold new houses stands at 35,000.

The CIF also said the price of newly built homes has fallen by 30 per cent over the past year.

CIF director Tom Parlon said the industry figures mean that there is less than an 11-month supply of new homes nationally, and under eight months in Dublin.

"These figures contrast sharply with recent reports on the housing market and give a truer indication of likely trends in sales over the coming 12-24 months," he said.

"With the European Central Bank expected to further cut its baseline interest rate within the coming weeks and the significant reduction in house prices that have already taken place, it is likely that consumer sentiment will improve in the short term."

Mr Parlon predicted that - as 20,000 new homes are likely to be built next year, largely one-off units and social housing - the current stock of new houses should clear quickly.

The CIF's analysis was carried out between September 1st and the middle of this month. It calculates that 45,000 people a year need to buy new homes. This means demand is building up.

However, sales slowed dramatically this year because would-be buyers have been unable to borrow enough money to finance the purchase of new homes.