As the sun sets on another golden summer's day, all is as it should be in the south Dublin suburb of Mount Merrion. In the lingering rays, plump cats bask territorially at the gates of neat family homes. The local park peals with the shrieks of children enjoying their new-found freedom from school.

Well-kept cars pull into driveways, and before long, the familiar smells of home-cooked dinners waft through the tree-lined streets.

Amid this maze of hilly avenues, dramatic views appear at every turn: the sweeping curve of the Dublin mountains, the shimmering roof of the new stadium at Lansdowne, and then a sight which has become almost extinct since the worst recession in modern times crushed Ireland's economy.

It's an estate agent's sign bearing the word 'sold' on its timber frame. Take a right and you see another, then a left and it's 'sale agreed'. Before you know it, you've counted a smattering.

Here in the heart of one of the capital's oldest residential suburbs, a middle class enclave of modest semi-d's, they're almost afraid to say it -- but a mini-property boom seems to be cooking.

In a market still impossibly tough to call, would-be sellers willing to take a gamble and put their homes on the market are finding queues of eager buyers outside their doors on Saturday mornings.

Telephones in neighbourhood estate agents are ringing with surprising regularity, leaving some offices with no choice but to hire new staff.

Even that distant Celtic Tiger concept of the bidding war is back in fashion.

"We have a bit of a joke going in the office at the moment in that we're having the dust down the 'sold' signs for a change, says Robert Lawson, a local estate agent with Lisneys. "In this small pocket of south Dublin, we've sold six houses in the last few months and typically we're seeing at least three people bidding on each. If you compare this year to last, the first quarter of 2009 was just diabolical. It didn't matter what you were quoting, you just couldn't sell properties. The market was dead. But confidence is coming back.

"All of a sudden, there's been a burst of activity and it's taking just four to six weeks to agree sales in the €500,000 bracket. You can't deny the presence of 'sold' signs in certain suburbs."

Yet it's unlikely this trickle of faith in the housing market is about to turn into a stream.

As the real impact of the credit crunch continues to unravel, recent figures show that house prices in Ireland continue to fall faster than anywhere else in the world, with prices nationwide declining by 42.9pc since the peak of 2006, back to where they were in 2002.

But a new survey by MyHome.ie reveals a compelling trend in the demand for three-bedroom houses, which for the first time since the crash of 2008 appears to be stabilising. In a remarkable twist of expectations, prices are even starting to creep up, albeit marginally, by 0.5pc for three-bed semis and 0.4pc for three-bed terraced. The study also found that Dublin prices appear close to bottoming out.

Market analyst Paul O'Connor has observed this budding trend with fascination. From his number-crunching firm, Propertyweek.ie, he devotes his days to counting how many properties go under the hammer every week and for how much.

In the first six months of 2010, there was a 65pc increase in the number of 'sale agreeds' in all Dublin postcode districts on the same period last year. From January to June of this year, out of a stock of about 5,000 properties on the market in Dublin city, 1,852 found buyers, compared with 1,118 during the first half of 2009.

It's still a long way to go from the overheated days of 2006, when about 5,000 Dublin homes would have sold during the first six months of that year, but it does suggest a change on the horizon.

"What is very interesting is that the vast majority of sales this year in Dublin are houses, with only 220 apartments achieving 'sale agreed' status out of the total 1,852 properties," says O'Connor.

"Apartment prices are wildly overvalued, by about 25pc, but houses are coming back to what the market dictates. I get the impression from our data that the first-time buyer has upgraded their target. They now look at nice, small houses rather than apartments.

"There is no property ladder any more. People want homes they can live in rather than investments. They're thinking if they're going to have a mortgage around their necks they want to have it on a house they can live in to a ripe old age. That's why these well-established suburbs close to the city centre with good amenities and public transport are doing well.

"You might get the impression that there is a bit of a rush but the reality is it's still a slow buyers' market. Only one in five of all Dublin properties that came on the market in January is sale-agreed after six months. But there is no doubt that in certain established residential suburbs, they are starting to move quicker."

So who are these intrepid buyers dipping their toes into the waters of the stagnant property market?

"Typically," says Lawson, "they are first-time buyers who have been sitting tight for a couple of years but believe the time is right to buy themselves a proper family home. They've been renting long enough and have decided they want a place of their own.

"In the last six months, we've also seen a lot of young Dubliners who are able to buy back into the places they grew up in like Churchtown and Dundrum, who up to now had to move out to places like Celbridge and Lucan.

"I don't think they are making any great call on where the market is going or not. It's just that prices are now in their bracket and they can afford to buy them. In some cases, they are down by about 50pc.

"These buyers want to put down roots so if prices fall another few percent, they think 'so what?'"

Several miles north in the suburb of Rathfarnham, property agent Justin Kinsella of Justin Kinsella & Associates tells a similar story.

"I sold a property in Mount Merrion recently. At the height of the market, it would have been valued at €1.1m -- €1.2m. We listed at €640,000. A lot of people looking at those houses were trading up from nearby suburbs like Leopardstown and Ballinteer. To make that move five years ago wasn't possible but the cost today is a lot more affordable. They are looking at a 50pc reduction so they see real value there.

"Up to now, many first-time buyers have been priced out of the market. A lot of them are back because those houses are within reach again. There is a feeling that the market has near enough reached the bottom.

"We're actually seeing familiar faces who postponed the purchase decision 18 months ago but are getting off the fence now. These are people who have been in apartments, have kids now and need more space.

"They grew up in places like Terenure and Dundrum. A lot of their older sisters and brothers were forced to move out to places like Navan and Naas and Carlow and have been commuting. But this generation want to buy as close to home as they can and now they are able to.

"But it's still only certain professions that are purchasing. The banks seem happy to do business with the old reliables at the moment -- the public servants whose jobs are secure -- but availability of mortgage finance is definitely still a barrier unless you're a guard, nurse or school teacher."

At Savills estate agents, business in the capital is on the up too.

"They're not queuing out the door but in the established traditional residential areas like Clontarf and Blackrock, any modest house we have up for sale goes in a matter of weeks," says Ronan O'Driscoll, head of Residential.

"Last year, people were like lamped rabbits. They were terrified to move. Now there is a feeling that the worst of the upheaval has passed and they are fed up waiting. Buyers see that prices have fallen by anything from 35pc to 50pc and they think this is starting to look like reasonable value.

"They also know they have a better chance of buying their dream home now because there are fewer people competing with them for it."

Irish Independent