Slowly but surely, reductions in asking prices are beginning to tempt buyers back into the property market.

After a traumatic 12 months, there may be a chink of light at the end of the tunnel for people trying to sell their homes - but only if they are prepared to cut their prices to reflect the current market.

Estate agents around the country are reporting an increase in enquiry and viewing levels and, in many cases, are agreeing deals on properties quickly once vendors have agreed to drop their prices. However some experts believe it is still too early to tell whether this increased activity is a result of bargain-hunting alone, or is a trend that will continue throughout the spring selling season.

Conor Gallagher, a partner with Douglas Newman Good who is based in the firm’s Fairview branch, has agreed quick sales on a number of properties following reductions in their selling prices.

These include Tineveragh on Carrickbrack Road in Sutton, a large detached house which requires modernisation. ‘‘We had it for sale for approximately six months last year, and were quoting a price of around €1.8 million,” said Gallagher. ‘‘We reduced the price to €1.4 million and, within a week, we had three parties bidding against each other. The property eventually sold for around €1.55 million.”

In nearby Howth, Gallagher had Kincora Lodge, a four-bed detached bungalow in Deerpark, on the market for five months priced at €1.75 million. ‘‘We reduced the price to €1.5 million, and sold it for a little under that figure within two weeks,” he said.

Gallagher has also seen examples of quick sales at the starter home end of the market. ‘‘We listed a three-bed semi in the Donaghmede area recently, at a very realistic price in the €350,000 to €375,000 bracket, and shook hands on a deal three days later,” he said.

‘‘It shows the interest that can be created when a property is realistically priced - the phones literally did not stop ringing for that house in a 24-hour period.”

John Fitzsimons of DNG Dowling Fitzsimons in Kildare has also seen examples of quick sales after price reductions.

‘‘We had a property in the Suncroft area near Kildare town which had been on the market for four months. After a price reduction of €80,000, it was sale agreed within four days. The reduction resulted in increased viewings almost immediately,” he said.

‘‘We also had a detached property in Kilcullen that was on for around €520,000, but we had limited interest - the two people who viewed it thought it was too dear. We advised the vendor to reduce the price and, a week later, we agreed a sale. It reinforced our view that there are buyers out there who are watching and waiting for prices to fall.”

In Drogheda, Co Louth, a €20,000 price drop on a three-bed semi in the Fountain Hill area resulted in a sale two days later, according to Giles Belton of Sherry FitzGerald Lannon. Another three-bed in nearby Tullyallen found a buyer in the same week that the asking price came down by €25,000.

‘‘The first-time buyer market and the middle market appear to be moving quickest,’’ Belton said.

Michael Gilmartin, of DNG Michael Gilmartin in Nenagh, Co Tipperary, had a four-bedroom property which had been for sale since last September with a guide price of €299,950. ‘‘I had maybe five to six viewers in that time,” he said.

‘‘Last Thursday, in consultation with the owners, we reduced the price to €287,500 and had two viewings this week.

‘‘I got an offer of €280,000 pretty much immediately. Both parties went after the house and, after 11 bids, it was sale agreed that day at €307,000.”

A new survey of estate agents released by stockbrokers Merrion Landsbanki last week backed up the anecdotal evidence provided by agents around the country. According to the firm, 77 per cent of the agents surveyed reported an increase in the level of enquiries and viewings in January compared with the second half of 2007.

Of those respondents, 62 per cent saw an increase in the number of offers made and sales completed. According to the study, there are now two types of vendors in the market - those who accept that prices have fallen and those who are still holding out for higher prices.

‘‘Respondents noted that those vendors who accept that today’s market is different to the market experienced in mid-2006, and who are prepared to price their property accordingly, are finding buyers,” the report states. ‘‘There remains, however, another group of vendors who continue to hold out for prices that are no longer appropriate and, as a result,are not attracting buyer interest.” Conor Gallagher agreed with the report’s findings.

‘‘It’s not true to say that the market isn’t moving, but what is true is that it is not moving where the price is too high,” he said.

‘‘If a vendor is reducing a price for a house that has been listed for months with no interest, a small reduction generally has no effect. More aggressive reductions produce results.

‘‘At the moment, we have a large number of properties which are on the market a short time and have been agreed, or are about to be agreed, because they are realistically priced. The only houses that are selling at the moment are the ones that have taken market conditions into consideration.”

Gallagher warned sellers not to base their asking price on the average prices reported in house price statistics. ‘‘What people need to take into consideration is the actual sales figures achieved for similar houses sold recently in their area, and they should always ask their agent for examples,” he said.

Merrion Landsbanki believes it could be some time before it is clear whether this increased activity represents a real upswing in demand, pointing out that falling prices will always attract bargain hunters.

‘‘Whether the increase in activity seen in January is mostly due to bargain-hunters entering the market, or whether there has been a real increase in the underlying level of demand remains unclear at this point,” the report stated.

However, one positive for vendors is that some agents believe the supply of second-hand properties in Dublin could be down by as much as 25 per cent on this time last year. If that estimate is proved accurate, it could go some way towards halting the pace at which prices are falling, and bring about a stabilisation in the market.

Sunday Business Post, By Gillian Nelis, 10 February 2008