House construction slowed in January, suggesting a slight easing in demand for new homes, according to fresh data.

Homebond registrations fell 15 per cent compared with the same month a year earlier, figures from the building insurer show. Homebond registrations are regarded as a useful barometer of the new home market. There were 3,283 registrations in January 2004, against 3,878 for the same month a year previously.

Activity was concentrated in Dublin, Cork, Limerick, Waterford and the eastern commuter counties. The capital recorded 418 registrations, Cork had 342, Meath 264, Limerick 240, Waterford 221 and Westmeath 207.

Commentators said that while Homebond results were generally regarded as an indicator of house-building activity, completions were likely to approach 2003's record total of 67,000.

Mr John Sheehan of NCB Equity Research said: "Anecdotal evidence points to continued strong levels of activity in recent months. Our assumption is that new house completions in Ireland will be [in the region of] 60,000 in 2004, the second highest level ever recorded."

Last month, Merrion Stockbrokers predicted 13 per cent growth in the residential mortgage market notwithstanding a slip in new house completions, a fall in second-hand volumes and concerns over mortgage affordability. The broker raised its 2004 mortgage lending growth forecasts from 9 to 13 per cent in light of strong loan pipelines among the main lenders and expectations of a continued low interest rate environment.

The era of high inflation in the building sector is over for the present with tender levels set to fall by around 2 per cent this year, in the wake of a 3 per cent slip in 2003, according to the Davis Langdon PKS annual review of the construction industry.