Economist Colm McCarthy has called for the abolition of stamp duty and the reintroduction of rates.

Addressing a property conference at the Michael Smurfit Graduate Business School, the UCD academic said stamp duty was "not a tax on ownership, wealth or income and, at 9 per cent, has closed down the secondary housing market".

Mr McCarthy said the current rates of stamp duty meant there was inevitably either a feast or a famine in the housing market.

He also attacked "rigidity" in the planning process, which he said had led to a 45 per cent price premium on properties for those choosing to live in Dublin in 2006. Calling on the Government to zone more land, Mr McCarthy added that the Dublin price premium had risen rapidly from 16 per cent in 1995 and from zero in the 1970s.

US economist Robert van Order said a drop in house prices was inevitable here, although it was "extremely unlikely" that prices would return to what they were five or 10 years ago.

Prof van Order said Ireland's subprime market was not big enough to do damage but warned against rapid expansion of sub-prime lending in the "more volatile" Irish market.