The housing market peaked at the end of last year, while house prices declined in December for the first time in five years, a new survey suggests. Davy Stockbrokers, compilers of the survey, say that it points to a "soft landing" for the housing market this year.

In its latest Irish Mortgage Broker Survey, Davy reports 51 per cent of brokers as saying that mortgage approvals were lower in the current quarter compared to the first quarter of 2006. Some 17 per cent said they were better and 32 per cent said they were unchanged. This represents the second successive quarter in which the survey registered a net annual fall in approvals.

However, despite declining in year-on-year terms, approvals bounced from weak levels at the end of last year. Some 36 per cent of respondents described approvals as being better in the current quarter than the previous one, compared to 20 per cent describing them as "worse" and 44 per cent as unchanged.

"In September, the junior coalition partner suggested that stamp duty change might be forthcoming in the December 2006 Budget. This probably added to the market slowdown," Rossa White, Davy economist and one of the survey's authors, said yesterday.

Mr White said that the property market "peaked" last year, but added that it would remain "resilient" this year. "We should remember that these declines are off a high base. The first quarter of 2006 witnessed record volumes of activity in the housing market."

He said that first-time buyers were having a significant impact on the market: "First-time buyers are really feeling the pressure from rising interest rates. The number of first-time buyers drawing mortgages in the second quarter was flat year on year, down 2 per cent year on year in the third quarter and down 20 per cent in the fourth quarter."

Data released by the Irish Bankers' Federation last week suggests that housing loan volumes fell annually by 13 per cent in the last quarter of 2006.

Davy yesterday revised down its estimate of the number of houses which will be built this year from 87,000 to 82,000. This represents a 7.5 per cent fall on the 88,200 houses built last year. Although new home prices will stay unchanged in 2007, Davy predicts prices are unlikely to fall.

"So far, the Irish experience is different to the US housing market collapse of 2006. Our conclusion is backed up by hard data, contacts in the market and the results of our mortgage broker survey," Mr White said.