A report on the housing market has suggested that house prices will rise by around 5% next year after a slight fall in the early part of the year.
The report, from IIB Bank, said there appeared to be 'little risk' of a sharp fall in prices unless there was a dramatic weakening in the economy. It said a 'significant cooling' was underway in the market, but fears of a downturn were overdone.
The bank's economist Austin Hughes said the ECB was set to raise interest rates again in March. He added, however, that while there was some risk of a further rise by the middle of the year, rates were approaching a peak.
The economist also said consumers had become more cautious about property, and half expected house prices to rise modestly in 2007, with a third seeing no change.
Meanwhile, Halifax Bank of Scotland (HBOS) has calculated that the value of Ireland's residential houses rose by 16% (€70 billion) last year to €516 billion.
The bank said the value of the Irish housing stock has increased by 111% over the last five years, with a
465% jump over the last decade.
Halifax said that Irish households have healthy balance sheets - and housing equity significantly outweighs mortgage debt.
Chrissy Quinn of Halifax said: 'Ireland's household balance sheet is in good shape. Total housing assets are worth 4.3 times the overall level of housing debt and housing asset values increased by significantly more than housing debt levels in 2006'.
Last year, the value of private houses (€516 billion) was 4.3 times the value of outstanding mortgage debt of €121 billion.
