The market is moving - but cash buyers are the key, says ISABEL MORTON

NORMALLY, with Paddy's Day behind us, we feel that spring has sprung. These days, we're finding it a little harder to differentiate between the seasons. It's as if the last 18 months have merged into one grey, cold blur.

Even the weather: people told us this week that the soil is still so cold that the poor little snowdrops and daffodils are struggling to make an appearance. Our property business is battling similarly against equally adverse conditions but there are still a few examples of survival against the odds.

With all the talk of surplus housing, there is still a functioning market. Viewing figures are strong and sales figures look like they will be considerably higher than those recorded during the first three months of last year.

However, reports on the state of the economy and property market are as erratic and prone to change as the weather forecast.

Like a "pet day" in the middle of a harsh spell of cold weather, last week's report from the employers group IBEC (Irish Business and Employers Confederation) stated that the Irish economy is showing signs of recovery.

Having in its recent quarterly report revised its economic trend, its earlier gloomy forecast that GDP would shrink by 1.6 per cent has now been reduced by over half, to a figure of only 0.7 per cent.

It is also more optimistic about Ireland's chance of recovery and has revised its forecast for economic growth from 1.7 per cent up to 2.1 per cent. While the report offers an element of hope, few are skipping around like little spring lambs, but some are cautiously optimistic that there just might be a sniff of change in the air.

Now, let's not get excited, I said a sniff, not even a whiff, let alone a gleam, a glimmer, or a shaft, nor even a ray - just a miserable wee sniff, no more than that. Given that many property owners have bitten their nails to the quick, haven't enjoyed a good night's sleep for months, have lost handfuls of hair, are grinding their teeth and popping happy pills like Smarties, then, the sniff of economic improvement is good enough at least for a start.

However, Lisney director David Bewley admits that securing a mortgage is still the main stumbling block for property sales these days. "There is movement at the lower level of the property market and some small movement at more rarefied levels but the key to all movement is that the purchasers are cash buyers. Whether they have seven grand in their pocketor seven million - they are cash buyers.

"Buyers believe there is now value to be had in the market and sellers acknowledge that prices must be realistic. There is at last, a meeting of minds between most buyers and sellers although there'll always be the few who'll refuse to accept the new reality."

Simon Ensor at Sherry FitzGerald agrees and says that "there are certain sections of the market which have over-corrected. Evidence of that is seen when the next property in the same estate sells for €10,000 more or when two or three people are chasing the same property. We've certainly had considerably more competitive situations now than we've had for a long time."

He went on to say: "In some cases the market is correcting the over-correction. If prices came down by too much, the market itself is pushing them back up to where the market determines the true value should be. In a number of cases the eventual sales price far exceeds the asking price."

But the sky clouded over once again for property owners this week when a report by Dr David Duffy of the ESRI (Economic and Social Research Institute) predicted a fall in property prices of a further 10 per cent this year and 5 per cent in 2011 before eventually levelling out in 2012.

Estate agents despair of these reports, which they believe are already months out of date by the time they are compiled and published.

As a result of their publication, prospective buyers, who had at long last decided to get down off the fence, may once again hold off buying in the hope of further price reductions.

Needless to say, even if we had a house price index, which the Government has promised but not yet implemented, records of house sale results would probably still end up being made public at least three months in arrears and therefore would not be applicable to a fast-changing market.

Having on previous occasions tried to point out these anomalies and the detrimental effect these reports have on the property market, estate agents have given up, aware that they will be shot down by those who, understandably, believe that they are just trying to talk up the market.

They may be correct. Yet, as I write, I'm attempting to purchase a property on behalf of a client and already I'm one of three parties who have made offers well in excess of the asking price.

Might there, perhaps, be some clear sky visible in the far distance? It remains to be seen. I'll keep you posted . . .