The current shortage of starter homes in the Dublin suburbs is expected to continue for at least another year. For this reason, a large number of Dublin's first-time buyers will have to settle for outlying towns like Mullingar, Athy, Arklow, Navan and Drogheda if they want to purchase a home.

Government measures to deal with the housing crisis will inevitably lead to a much greater supply and more price stability but, according to agents specialising in the new homes market, this is unlikely to happen for about two years because of a slowdown in the planning process and delays in providing services on zoned land in the Dublin suburbs.

The scarcity of new houses has already led to sharp price increases over the last two to three years. Eighteen months ago, three-bed semis in the west and north Dublin suburbs broke through the £100,000 barrier for the first time. They have now gone to £135,000 in the Lucan area and in one case, Finnstown, prices have already hit the £150,000 mark.

Prices generally have risen by about 20 per cent in the past year and new homes specialist Gerry Leahy is forecasting that all starter homes in the Dublin suburbs could possibly tip the £150,000 mark within the next year. Similarly, he expects three-bed semis in the outer commuter areas to move to at least £100,000 next year.

This view is shared by estate agent Ross McParland. He expects starter prices to rise by £7,000 by next summer, and by £15,000 up to the end of next year. After that, he says, prices will probably stabilise as the Government measures to service zoned land and increase densities lead to a greater supply of new homes coming on the market.

Even as things stand, there is no shortage of land zoned for housing in the Dublin area. A recent study by the research department of Sherry FitzGerald shows that there are now 6,859 acres of zoned housing land around the city. About half - 403 acres - is in the Fingal County Council area. Dun Laoghaire Rathdown has 1,104 acres, South County Dublin has 2,100 acres while in the Dublin Corporation area, there are 252 acres. However, a large proportion of the entire land bank is either not serviced or has inadequate road access. That situation is unlikely to change significantly in the short term because of inadequate funding.

Even before the land on the south side of the city comes on stream, it is widely accepted that most housing sites in this area are already out of bounds for most first-time buyers. The upward movement in prices has been particularly noticeable in south Dublin over the past three years, partly because of a fall-off in supply. The two largest developments presently under way, Cherrywood and Mount St Ann's, in Milltown, will appeal to people either trading up or trading down, but not to first-time buyers unless they have a good cash reserve under their belt.

On the opposite side of the city, two of the largest schemes proposed, Phoenix Park and Baldoyle Racecourse, are still on the drawing board, though the company planning to develop a large site at Blanchardstown Hospital should be in a position to proceed with about 1,500 residential units in the first half of next year.

With building land in the city suburbs rapidly running out, Ronan O'Driscoll, of Hamilton Osborne King, believes houses will continue to get smaller and that next year the three-bed semi will finally go out of fashion after 40 years. He says it will be replaced by terraced houses, with two-bedroom townhouses becoming the standard new house type for young couples. As part of this change, he expects to see more apartment schemes in suburban locations.