There was a sixth consecutive quarter of growth in the volume of house sales, according to a new housing monitor.

The Irish Banking Federation says the report points to a continued stabilisation in prices.

The report draws on published data on the residential housing market to provide a composite analysis on where the market may be going.

The Monitor shows that, while the number of properties listed for sale during the first quarter fell 15% compared to the previous year, there were 14% more property transactions over the same period.

The report says property prices continue to show signs of stabilisation, with a fall in prices nationally of 3% in the first three months of 2013 compared to the same quarter in 2012.

Dublin property prices saw their first year-on-year gain since the summer of 2007 with prices 1.4% higher than a year ago.

There was a fall in the number of mortgage approvals and mortgage drawdowns in the quarter compared to a year ago.

The MIR effect

Dermot O'Leary believes that the mortgage market in the first months of 2013 experienced a ‘hangover’ from the ending of mortgage interest relief at the end of 2012.

"In contrast to the fall in mortgages drawn down, the number of property transactions increased by 14% in Q1," he points out.

"While one interpretation of this may be that credit is not available in the banking system, another is that buyers are using cash to invest in the Irish property market given the superior returns relative to ever-shrinking deposit rates in the Irish banks," he explains.

He also points to significant differences between the capital and the rest of the country.

"Dublin is returning to annual growth for the first time in over half a decade," he states.

"However, a concern would be that prices are rising predominantly because of a lack of available supply," he concludes.