The property market is finally showing signs of slowing down with the exception of some areas of Dublin, according to a report by property website Daft.ie.
Daft's property report for the second quarter shows that annual house price growth has slowed from 14 per cent in April to 6.2 per cent in July.
Meanwhile buy-to-let investment yields in Ireland are at an historic low with the average yields now at 3.27 per cent implying a negative real return on rental property. Limerick is the now best place to invest in buy-to-let property with an average yield of 4.07 per cent.
Commenting on the figures, Eamonn Fallon, director, Daft.ie said "Because our figures are based on advertised asking prices rather than on closing prices we can see trends as they happen. This may therefore be the first indication of a soft landing for the Irish property market."
He added while there are still areas where price growth is steaming ahead, many parts of country are beginning to see a much more realistic house price growth which is more sustainable in the longer term.
While in general there is a slowdown across the market, prices in some areas of Dublin are showing still heading skyward. The average price of a property in Dublin is now €483,000, more than twice the average price of property in Ballina, Co Mayo which is €220,000.
Meanwhile a new record has been set in south county Dublin with the average price of a four bed property now costing more than €1 million.
According to Marc Coleman, economics editor of The Irish Times, the property market is overvalued by as much as 15 per cent but we are unlikely to see a downturn.
"Despite some over-valuation in the market a downturn is unlikely for two fundamental reasons, namely the expected release of SSIA moneys, which began this May and became bankable as deposit leverage and secondly, more liberal mortgage lending policies introduced by banks at the turn of the year."
The low-density housing policy of the Dublin planners is also having an adverse effect on house prices according to Mr Coleman. "Use of land within the M50 is highly inefficient: In a land footprint the size of Berlin, we are housing less than one third of Berlin's 4 million population. Unfortunately this is where people want to live."