Estate agents Sherry FitzGerald has said house prices have fallen but suggests this may be a temporary phenomenon.

It said the average price of a second-hand property in Dublin fell by 1.1 per cent during the second quarter of 2001 with results for the first six months showing price reductions of 0.29 of a percentage point.

The group's economist, Ms Marian Finnegan, said this reduction had all the signs of being temporary, driven mainly by Government changes in the application of stamp duty, reduced consumer confidence and the decision by financial institutions to tighten up on bridging finance, specifically open-ended bridging.

"This has created a chain effect with purchasers unable to sign contracts until their existing property is sold," she said. "This is particularly notable in the middle to upper end of the market with a resultant increase in the length of time it takes to sell a property." She added that the demand for property had not diminished with population growth, falling interest and tax rates underpinning the housing market. The problems facing the housing market had not been truly resolved, Ms Finnegan said.