IT MIGHT be the first positive news they have had in five years but CSO figures indicating that house prices have had their first monthly rise since 2007 are being met with cautious optimism by the property industry who say lending must resume before the market recovers.

Angela Keegan, managing director of myhome.ieurged the need to "tread cautiously" before jumping to any conclusions.

“The CSO sample, based on mortgage drawdowns, is a very small sample and the figures could indicate short term volatility rather than a longer term price trend. The figures would need to be viewed over six months to a year before a trend could be determined.”

Keegan does however believe that prices are stabilising in some areas. “We are seeing properties in some areas priced slightly higher. These would be in solid suburbs of Dublin near good transport links where there are shortages of stock. But if you stand back and look at the entire country, there’s still a lot of stock.”

IAVI estate agent Martin O’Mahony, based in south Dublin, says the shortage of property in his area has led to multiple bidders on good properties, “We recently had 17 bidders on a property, nine cash buyers and eight loan approved. There are signs that people sitting on the fence are now seeing the value of the market and anything good is being snapped up . The big difficulty is finding stock. I can’t see property flooding onto the market because vendors are saying ‘I ain’t going to sell for that sort of money’.”

He says the banks are putting people through hoops in an attempt to play for time.

“For properties priced up to €300,000, there are a lot of cash buyers out there, but if banks don’t start giving out money it will grind to a halt.

“I recently met a medical professional couple who want to buy and the bank asked them for six months’ bank statements which they supplied. The bank then came back and asked for 12 months’ statements and when they supplied them, they asked them for six months’ credit card statements.

“They gave the bank 12 months’ statements to save time and then the bank came back and asked them to detail what each transaction was for. It’s a delaying tactic, the banks don’t have money and don’t want to give out money. If they’d implemented this strict policy 10 years ago we wouldn’t be where we are now.”

Calling the CSO Index result "a little blip that we should welcome" Frank Conway of Moneycoach.iesaid he is still concerned that lending, "the key ingredient for a functioning market", is still absent. "I base this on the extremely low level of mortgages that were granted in the first quarter of 2012."

However, he says despite the further fall in mortgages, the market is showing signs of improvement. “The never-ending month-on-month falls in prices look like they could be tapering off. This is key since it appears to be happening on the back of so little lending.”

Another concern is that CSO figures are based on mortgages drawn down and don’t take into account cash sales which account for at least 25 per cent of the market.

Frank Conway says he would like to see what is happening in the cash-buyers’ market.

“Are prices falling there also? My sense is that there is still a lot of negotiating taking place. For example, I personally know of three cases in the last three months where cash buyers negotiated list prices down by 10 per cent or more.

“Again, without that all-important credit (mortgage) market, the property market will continue to be held hostage by cash buyers and the flexible forces of the real market will be curtailed.”