IIB Bank chief economist Austin Hughes this weekend warned that a "rude awakening" awaits many sellers putting their property on the market this autumn.

"While there is no sense that prices will drop, some sellers will have to adjust their expectations of price. There is no way that the price inflation of spring will be matched, " Hughes told the Sunday Tribune.

The number of houses offered for sale by Dublin estate agents has increased by 25% compared to figures for the equivalent period last September, according to the managing director of one leading agency. These extra properties, added to the glut of withdrawals at auction over the summer, has resulted in an over-supply of second-hand homes in Dublin.

According to latest figures from Daft. ie, it has 17,587 second-hand properties for sale countrywide on its website, of which 2,791 are for sale in Dublin.

Another internet website, MyHome. ie, has even more second-hand homes for sale in Dublin county and city, totalling 4,533.

Confidence Despite this, seven in 10 respondents to the latest Sunday Tribune IMS Millward Brown opinion poll still believe that house prices will increase over the next 12 months. Last Thursday's Irish Times property supplement had a record 66 pages, 51 of which were full-page ads from the leading agencies.

It was followed on Friday by a bumper 64-page Irish Independent property section.

According to Declan Cassidy of Gunne Residential, there will be a significant number of withdrawals at auction in the much shorter autumn selling season. This will be caused by the high number of properties on sale and the expectation of sellers, which have become too high because of the sensational prices fetched earlier this year.

Sherry FitzGerald has reported that Dublin house-price inflation hit a record 21.2% for the first six months of this year, but the rate of increase slowed down markedly after Easter. Over the summer months, many owners rubbing their hands in expectation of a windfall were left, in many cases, with a house that failed to sell at auction.

Simon Ensor, Sherry FitzGerald's director of auctions, confirmed that the stock of houses new to the market is much higher than last year. Because of this, houses going up for auction won't get as many viewers as before the summer.

"But prices won't drop, they will stabilise, " Ensor stressed. "We have an average of 25 viewers per house on a Saturday afternoon, much less than the heady days of February and March. But when you take into account the increased number of houses now on the market, you can see that the same total number of buyers are spread more thinly."

Eamonn Fallon, a director of Daft. ie, also predicting a 'soft landing' rather than a crash. "We haven't noticed house prices coming down but there's certainly been a levelling off in the asking price. Vendors will definitely not be seeing the same sort of profit from their property that they would have seen at the beginning of spring."

There is growing speculation that home-owners are putting their properties on the market in the fear that they may have missed the boat in scooping a record price. The increase in stock is contrasted by a drop in turnout of viewers in the auction market. Part of the blame must rest with some estate agents giving unrealistic valuations, a story which is similar at the lower end of the market.

One owner experiencing minimal interest in her ready-to-walk into apartment in Dublin 8 blamed the failure to sell solely on the bombast of her selling agent.

"The agent set the price at 315,000 . . . way over what I would have been confident was a realistic figure. There were no enquiries whatsoever for three weeks. I suggested that the price was too high and that we should lower it and the agent eventually agreed to reduce the price to 295,000. That was a week ago and so far I've had one viewing. I've been checking property websites and have definitely noticed prices coming down in my area since the summer."

House-price inflation for the first six months of 2006 overall was 21%, according to Sherry FitzGerald chief economist Marian Finnegan, who adds that early September is always a period with a high stock to sell.

"We won't really know what is happening in the market until mid-October and there are four good selling weeks before that. So far, we haven't witnessed any drop in viewings or a dip in terms of demand. It has been a year of records so far, and despite the rising interest rates, there has been strong growth in prices."

Three more interest rate hikes are expected before next February, with one next month and the second in December. Mortgages have gone up four times in the past nine months.

The high rate of increase in home loans has slowed since early summer, according to a recent report by the Irish Bankers Federation and PricewaterhouseCooper. The total value of mortgage loans to the end of June this year was 18.6bn. The average first-time buyer now has to borrow 227,454.