There is increasing evidence some newly built homes are not selling, a conference on the future of the Irish construction industry heard yesterday.

John Morris, chief underwriter for Ireland with payment protection insurer Atradius, which hosted the gathering in Dublin, told the meeting homes in new estates built on the fringes of rural towns and villages were increasingly lying idle.

After the conference Mr Morris told The Irish Times there was "anecdotal evidence at least" that many homes in estates like these were not attracting buyers.

Another speaker at the conference, Declan Flood, chief executive of the Irish Institute of Credit Management, said some figures showed one in six dwellings in the Republic were not occupied.

Atradius has written about €7 billion worth of business in the Republic, and €2.3 billion comes from the building industry.

However, while Mr Morris said the building industry was facing a tough period, he stressed the "carnage" many observers were predicting would not materialise. He added most of the firms at risk were small subcontractors or operators that had grown quickly with the boom and had management problems.

Another speaker, Tom Kavanagh of insolvency and corporate rescue specialists Kavanagh Fennell, echoed this, and said most of the construction-related cases with which his firm has been dealing are smaller operators or subcontractors.

Mr Flood said the slowdown is filtering through to development land prices which had fallen by about 20 per cent over the last year. He added that property in the Republic was overpriced.

Mr Flood said the Republic needed to shift policy to concentrate on developing high-value-added activities such as research and development, and on sectors such as technology, biotechnology and pharmaceuticals.

"We can't keep depending on construction," he warned.