House prices in Ireland have now bottomed out, says Irish Finance Minister Brian Lenihan, and it is time to start buying again.

Now that all the bad bank loans have been placed in a special 'bad bank' known as NAMA, Lenihan says the residential property market will stabilize.

"One of the good things is that the residential property market will now be stabilized at a realistic level," Lenihan told the Sunday Independent.

He added: "You can now buy in confidence that the price is realistic."

There are anecdotal signs that the bust may be over. In Mullingar about 60 miles from Dublin there were long lines this weekend to snap up a three bedroom apartment going for €97,000, an unheard of price in recent times.

Many other such firesales may occur around the country as distressed builders seek to offload apartment and housing blocks in order to keep up repayments to foreign banks not covered by NAMA.

The Finance Minister's belief that the property market has hit the bottom will come as a surprise to a number of economists, and other observers of the market, who recently predicted a further decline.

Officially, overall asking prices nationally have fallen 27.3 per cent from their peak in 2006. However, on the ground evidence suggests that prices are already up to 50 percent lower than at peak.

Lenihan says there are encouraging signs for the economy including a 31 percent increase in new car sales and signs that the tourism industry is also making a comeback.

 "People are buying motor cars and, now that a realistic value has been established, more people will also buy residential property," he said.

"This will begin the rebuilding of confidence because up to now many people were holding back."