There are some important signals from the latest Daft.ie report on house prices. Clear signs of moderation have appeared in the Dublin market and in some of the other major cities. Initial figures, drawn from the Property Price Register, suggest a 2.3 per cent fall in Dublin sale prices between March and June of this year, though all sales may not yet be on the register. Listing prices are still rising, though less rapidly – in Dublin the annual growth rate has halved to around 3 per cent. A two tier housing market has emerged. Prices outside the major cities are rising much more quickly, probably due to the acute lack of supply in many of these areas. Where supply has risen, it has generally been in urban areas, but even here it is below what is needed to deal with a rising population, never mind pent-up demand. The other factor playing into the figures is simple – house prices are simply unaffordable to many, particularly in urban areas. Prices have continued to rise over recent years, nonetheless, as there have been enough buyers at higher prices. Now, it looks likely that the top of the market is being affected by some problems in high pay areas, such as technology. Meanwhile, at more average price levels, many new homes in urban areas are now above the price levels which qualify for State supports for first-time buyers .The chronic shortage of supply, particularly in the second-hand market, will continue to make it a sellers’ market. But it is now likely that prices are significantly above what would be justified on the basis of the state of the economy. For buyers, house prices remain in short supply and the vast majority believe that they are now poor value. They still buy because they need somewhere to live and rents are unaffordable. The Government’s role in all this is to do what it can to encourage supply. There has been some progress, but a lot more is needed. And trends in planning permissions, as the Economic and Social Research Institute (ESRI) point out, give some cause for concern about the pace of improvement.