According to the latest MyHome.ie quarterly survey of house prices, the rate of increase in house prices continued to slow in the three months to the end of June.

The annualised rate of increase nationally now is at 6.1 percent with the rate in Dublin at 10.4 percent.

According to the survey, the mix adjusted asking price for a house nationally is €202,000 while in the Capital it is €282,000.

Critically, the rate of new instructions – the increase in price levels targeted by sellers with their estate agents – has fallen to its lowest level in the Dublin region since late 2013 – at 0.8 percent.

According to Conall McCoille from Davy Stockbrokers, who has assessed the data for myhome.ie – this reducing rate of price instruction and the increased impact of Central Bank mortgage lending restrictions could see the annual rate of house inflation fall towards 5 percent by the end of the year.

“While the Central Bank’s new lending rules have now kicked in, cash buyers still account for over 50 percent of transactions in the housing market. It will probably be the second half of the year before their impact becomes apparent."

He continues: "The combination of falling mortgage interest rates and rising rents makes house purchase more attractive but the fact we didn’t see the usual seasonal pick-up in mortgage approvals in April is noteworthy."

The economist warns that with a general election looming, the Government must avoid introducing any measures aimed at relaxing credit constraints which could stimulate further demand.