Reports out this week from two of the largest estate agencies in Dublin fail to agree on the prospects for the property market. According to Savills HOK, the news ain't good. House prices are not expected to grow in 2007 and no good news can be expected until the interest rate cycle peaks in spring 2008.

Earlier in the year its research department had predicted that the housing market would change from high price growth to low price growth. They felt that real price growth of just 1-2 per cent above 4 per cent inflation would be achievable, that home prices could keep up with incomes.

Factors that have changed since then are the higher interest rate outlook and the slowdown in market activity. Europe is now growing faster than America, especially with a resurgent German economy after so many years of low-growth. Consequently, interest rates are now unlikely to peak until next spring 2008 at 4.75 per cent.

Paul McNeive, managing director of Savills HOK said: "Domestically, the new homes market is very sluggish with concerns over affordability. There is a good choice of property available for buyers, in a more sustainable market. Supply is reducing sharply and prices will increase in some areas next year as the interest rate cycle tops out. The best bargains will probably be bought this year."

Over at Lisney the mood is a little more upbeat. While admitting the "exuberant" growth levels of 2006 will not be repeated in the near term, Lisney anticipates sustainable increases in values over the remaining months of this year and into 2008.

Following a shaky start to the year the "mood of the market has improved somewhat and sold signs are appearing around Dublin", Lisney's economic department insists.

The maturing of SSIAs and abolition of stamp duty for first-timers have eased financial obstacles to buying. This, combined with indications that we are nearing the top of the interest rate cycle and the much expected "pent-up demand" in autumn, will result in "sustainable increases", Lisney argue. Meanwhile, both agencies have a solid backlog of property to sell, and that's before they start taking on new properties for the autumn season.