Some 6,000 new homes are set to be built in Dublin this year, a dramatic fall of 65 per cent on 2006 figures, according to a new report on the nationwide housing supply from new homes agent Hooke & MacDonald.

The report, published this week, also estimates that there are in the region of 5,500 completed and unsold new homes in Dublin.

Interestingly, Hooke & MacDonald notes that the stock of completed and unsold properties in Dublin would be much higher were it not for a high level of pre-sales from plans during 2005 and 2006.

The fact that a number of builders have opted to rent out completed units - rather than leave them empty - has also helped reduce the number of unsold stock, it says.

The industry responded speedily to the slow market, according to the report, cutting house starts by 35 per cent in 2007.

The cut was even more marked in Dublin, where house starts in 2007 were cut by 44 per cent - down to 8,700 from 15,427.

The report states that of the 48,000 completions predicted for 2008, 16,800 will be one-off houses, 9,600 will be local authority houses, and 21,600 will be private homes available to purchase.

Hooke & MacDonald has reported that enquiries and viewing appointments have "increased steadily" since the start of the year and is predicting that the "market will return to normality" by spring 2009.

The main issue preventing the return to normal market conditions, according to Hooke & MacDonald, is consumer confidence.

Like the CIF, the agent is predicting a shortage in supply in "key urban locations" within the next 18 months. Fingers crossed!