A property review published by the Bank of Ireland today forecasts that the average price of a house will climb towards €400,000 by the end of this year.

This figure is much higher that earlier reports had predicted.

The bank's Irish Property Review forecasts that 2006 will set new records for house prices, house building and mortgage lending, though price growth will slow towards the end of the year.

The European Central Bank is meanwhile expected to increase interest rates again on Thursday.