Estate agents have warned it is going to take longer to sell houses in the current market but insist prices will continue to rise, albeit at a slower rate, for the rest of this year.

Sherry Fitzgerald economist, Ms Marion Finnegan, said that as long as vendors are facing difficulties in securing bridging finance, it will take longer to sell houses.

"Property will be slower to sell unless the bridging finance issue is resolved," she said.

Ms Finnegan does not foresee any significant fall in house prices in the coming months, and believes house values will increase again from next month when the season gets back into full swing.

But any increase will be lower than in the same period last year, she said. Most estate agents are hopeful that a cut in interest rates and possible tax cuts in the Budget will help to restore a degree of confidence to the property market.

They also insist that demand for property remains very strong and that the Irish property market will continue to be supported by very strong fundamentals.

Ms Catherine Flanagan of Lisney said there are still a lot of properties coming on the market and is optimistic that the September season will open strongly. "There has been a substantial increase in viewings in the past two weeks and prices have been rising," she said.

The more expensive houses, over £500,000 (€635,000), are not selling as quickly as they had previously, according to Lisney. Houses below £300,000 are continuing to sell well.

The first time buyers segment of the market is still holding up quite well, with sales being completed fairly quickly.

This is mainly because they are not affected by the lack of availability of short-term bridging finance from lending institutions.

Mr Niall O'Grady, head of marketing at Irish Permanent, welcomed the return to more moderate growth in house prices.

"The continuing moderation in the annual growth rate suggests that the strong growth levels experienced over the last four years are being replaced by more moderate and sustainable levels of house price growth. Our analysis shows price growth remains strong at the lower price bracket and there is a return to more realistic prices at the upper end of the housing market," he said.