The Irish housing market is experiencing "a roll back from the excesses of the last two years" rather than a full-blown recession according to official figures, which show a 16 per cent drop in house completions for January, compared with the same period last year.
The Sunday Independent has learned that over 4,858 houses and apartments were completed in the first month of this year.
Intriguingly, while house completions were down on a nationwide basis, output in the "critical high density" Dublin region was up by 6.1 per cent on 2007 figures, while it was up by 3.5 per cent in the equally important greater Dublin region.
Housing Minister Batt O'Keeffe claimed yesterday that the January figures "do not lend support to those who have been predicting the virtual collapse of new house output".
Mr O'Keeffe noted that the figures, so far, were closer "to levels in 2003 and 2004, when 77,000 units were built rather than the catastrophic 40,000 units predicted by some of the doom and gloom brigade".
The minister said indications were that up to 55,000 units would be built, and that all recent figures suggested that "the downward adjustment in supply [had] been more gradual than predicted".
Significantly, the minister also noted that "some of the highest reduction in completions has occurred in areas where holiday homes may have been a significant element in recent years".
In an explicit rebuke of the former PD minister Tom Parlon, Mr O'Keeffe repeated his warning to builders that they should cut their prices and not sit on empty housing stock until the market recovers to 2007 prices.
Last week, Mr Parlon, who is now Director General of the Construction Industry Federation, called on the minister to withdraw claims that "a cartel of big builders was suppressing housing output".
But Mr O'Keeffe said he had nothing to apologise for and he again called on the industry "not to overdo cutbacks in construction".
"A housing market that was notorious for cycles of over-activity and undersupply . . . after years of overdoing things . . . is experiencing a backlash and (must) adjust its priorities accordingly," he said.
"Having already killed off one golden goose", builders and developers who failed to adjust to new realities in demand and pricing could endanger the current "tentative recovery", he warned.