The Irish construction sector is capable of weathering the current storm in the industry, meaning new buyers should not hold out for further cuts in housing market prices, according to the man at the helm of Construction Industry Federation (CIF).

Tom Parlon, head of the CIF, has said potential buyers who are speculating that prices will be dramatically slashed are wrong, and should begin to take action.

Mr Parlon, a former TD, said house prices are now a realistic rate, a view he said is backed by the Central Bank: "The industry has spoken very clearly by cutting off supply to the market. Throughout the country developers are cutting prices where the market dictates and prices are back by at least 15 per cent since mid-2006. People shouldn't be sitting back and waiting for more cuts, because as the Central Bank governor John Hurley said, prices are realistic now."

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Mr Parlon said the market needs a national return to confidence, which could turn-around the fortunes of those beginning to suffer from the slowdown in the construction sector.

The CIF head is sure, despite the current climate, that the sector is strong enough to make a recovery: "There is no doubt that the downturn in housing output and sentiment have created problems in the housing market, there are going to be 45,000 new units this year as compared with 78,000 last year, and next year may be the same."

"However, all the demographic figures show that there is a 60,000 per year demand. The sooner confidence is restored, the better for buyers, owners and the economy."

Mr Parlon said it is not only the industry that has suffered as a result of the fall, the government's pocket has also been dented.

(PR/JM)