A NEW report on the housing sector says that 78% of estate agents expect no improvement in the market over the next 12 months.

NCB, one of Ireland’s largest independent securities firms, issued its quarterly residential property survey which reveals ongoing weakness in the residential market, with tighter credit conditions becoming a problem, especially for first time buyers.

Banks have also been increasing interest rates on mortgage products as funding becomes more expensive.

This, coupled with a European Central Bank (ECB) interest rate increase earlier this month, is making buyers more cautious. NCB notes that there is little near term prospect of relief from the ECB, as inflation remains its main concern.

Fully 72% of respondents to the NCB survey said that overall business activity was slower in the second quarter of the 2008 compared to the first quarter. Estate agents reported fewer viewings, fewer sales and also said that the length of time taken to sell a property had increased.

There were 85% of estate agents who said that asking prices had fallen in the three months from March to June, while 15% said they remained static. Some reported that sellers were becoming more aware of the new realities in the market and adjusting their prices accordingly.

They added that where houses are priced realistically sales are going through.

44% of estate agents surveyed that asking prices for houses fell between 6% and 10%, while 36% said that asking prices had fallen by more than 11% between the first and second quarters of the year.

NCB says the survey results are based on 47 responses from a total of 185 estate agents contacted between June 16 and July 4.