An economist from leading property website, Daft.ie, has said that the gamble taken by Galway estate agents over the past year "seems to be working".

According to Ronan Lyons, "Galway was slightly ahead of the curve in adjusting downwards," in 2007 and the 1.2 per cent increase in asking prices over the first quarter of 2008 reflects a slight bounce-back for the market.

Speaking to the Galway Independent, Mr Lyons said, "Part of this is that Galway was probably a bit overpriced to begin with – if you look at Cork, it's a much bigger city and Galway was more expensive. It was really a correction in asking prices, down about €30,000 - €40,000 in mid to late 2007."

"In our January report, which was a review of 20007, Galway stuck out like a sore thumb. It was down about ten per cent, whereas other places were the same.

"The adjustment made in Galway six to nine months ago is now being made elsewhere, and Galway has stabilised in the last three months so the agents are obviously getting some interest with the reduced prices."

"What happens is that if the estate agents work in networks to reduce the prices, that will spread, and it shows up in the figures. It's like one of those ads, 'Sale now on in property'."

Despite the good news for Galway City, the rest of the county and of Connacht has not been so lucky.

"There is a large number of properties for sale in Galway and Connacht, as well as the three counties in Ulster we surveyed. There's a lot of stock on the books, it's not as bad in Galway City but there is an overhang of stock in Connacht, and a ten per cent reduction may not suffice," continued Mr Lyons, saying sellers may have to reduce prices again in three to six months if the current 'discount' is not sufficient.

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