One economist put it succinctly last week: 12 months ago the country was enjoying a 'champagne economy', but now the 'fizz' has gone out of it. Yet if the most important bubble in that economy . . .

namely, the property market . . . hasn't quite burst, it's not just the economists who are talking in couched language now. Perhaps it's inevitable that the more sensational words and phrases are being used within the context of what happened in spring 2006 when house prices appeared to be orbitting somewhere around Pluto.

Many vendors sought to take advantage of those escalating prices by putting their homes on the market for the autumn season. But then, as uncertainty began to kick in as to whether there would be changes in stamp duty rates, coupled with several interest rate hikes beginning to pinch, potential buyers were not tempted, even by the higher than usual choice of secondhand homes.

Almost six months later, some of those properties are still on sale. Another rise in interest rates expected this summer will mean that rates have doubled in the past 18 months. And here's another phrase often bandied about . . .

'buyer's market'. The only thing is that a survey revealed this week that those potential buyers have become not only cautious, but fewer in number. As one negotiator explained, where last year, her agency would have witnessed dozens of people turning up for viewings, that figure is down to three or four people now.

"It's true that borrowing costs have risen dramatically, and that has affected confidence, but the outlook is not as gloomy as some of the headlines are predicting, " says Austen Hughes, chief economist with IIB Bank who, together with the ESRI, published their consumer sentiment survey on the housing market this week.

"There is a correction in the market, a necessary adjustment after spring 2006. Talk of a housing market collapse is sensational . . . but unfounded. That would only happen if the economy itself collapsed, and there is nothing to suggest that." Hughes says most economists agree that there has been a 'bumpy' start to 2007, with potential buyers no longer feeling the pressure to purchase in a rush. The trading-up sector of the market has been noticeably affected by this tempering of activity because the cost of financing that gap has become greater.

And it's not only mortgages that are now being switched for a better deal. Some sellers whose houses have been on the market since autumn have swapped their estate agent too in an effort to generate new interest in their hard-to-shift property.

Homes are being re-introduced to the property supplements for editorial publicity, and in many instances, with prices lowered. A property submitted to this newspaper for editorial coverage recently has had its asking price reduced, not once, but four times. This four-bed, 171 sq m (1,841 sq ft) in Holmwood, on the Brennanstown Road in Cabinteely, Dublin 18, originally came on the market at 1.7m. It was subsequently reduced to 1.63m, then 1.55m and is now for sale at 1.495m. One agent we spoke to says that properties in some of the popular red-brick terraces in parts of Dublin 8, that last year would have carried a 1.2m price tag, are now coming on for 995,000.

Despite the 'doom and gloom' market predictions, there are always properties that defy the headlines about a drop in house prices. Kate Sissons of Gunne Residential's Ballsbridge office cites a recent auction where an AMV was set at a very realistic 1.1m, but which actually sold under the hammer at 1.265m. "There are still people looking out there, but they don't feel the urgency to come back with an offer right away.

Yet while it's taking longer to sign a deal, there are deals to be done. The pace has definitely changed, but that's better for everyone in the long run."