It’s happened. The Irish property recovery has lost momentum following new lending restrictions from the Central Bank.

Dublin property prices are on the decline, with house prices down 0.3 per cent last month and apartment prices falling by 0.4 per cent compared to May.

The Central Bank introduced restrictions on mortgage lending in February (to try and prevent another property-price bubble) and they seem to be having an impact.

Agents are reporting a definite cooling in the Dublin market, with property prices falling for two months in a row.

While national property prices increased, up 0.1 per cent in June, they rose at the slowest annual rate in more than a year.

A continuation of the monthly price rises which occurred in the second quarter, for the remainder of the year, would result in a very low single-digit increase come December.

It’s been noted that lower prices will be welcomed by the IDA. The agency has had a harder time attracting new foreign direct investment into Ireland due to soaring commercial and residential property rates.

However, the lack of housing supply in the capital, which pushed prices up, cannot be rectified overnight.

The Ireland Strategic Investment Fund is aiming to facilitate the construction of up to 10,000 new homes nationally, entering the private residential property market in a €500 million plan.

As for the mortgage-lending restrictions, they seem to be having an impact, but how long can any slowdown actually last?

Data is showing that Dublin’s population has picked up strongly with people flocking to the capital for jobs.

With housebuilding currently at a standstill in the capital, and more and more people arriving into the city, there will still be upward pressure on prices in the long run.