How it affects employment:Around 30,000-35,000 jobs are expected to be lost from the housing sector, but some workers will find jobs in other parts of the construction sector such as public infrastructure.

Goodbody estimates that net job losses will be 25,000, while other forecasters predict a net 20,000 jobs will go.

How it affects consumer spending:

Higher unemployment and lower employment growth will reduce growth in consumer spending to 3 per cent next year, compared to a "healthy" rate of 6.5 per cent this year, says Goodbody. Deteriorating confidence could also hurt spending.

How it affects tax revenues:

The tax yield will fall at least €1 billion short of its target because less than expected was collected from property taxes such as stamp duty, capital gains and VAT. Goodbody forecasts only a 3-4 per cent increase in tax revenues in 2008 as housing activity drops off.