Rating agency Fitch has said it expects further falls in both residential and commercial property prices in Ireland. It said it has already factored such falls into its analysis of the country's rating.

The Permanent TSB/ESRI index for the second quarter of this year suggests that Irish house prices have declined by 35.2% since their peak, but today Fitch said it believes this will likely understate the full decline.

'Fitch already assumes a 45% decline in residential values from their peak levels in its base case analysis,' the agency said.

It added that the full effect of the mortgage market stress has yet to be seen and said that while arrears levels continue to increase, very few houses have been repossessed so far. It also expressed concern about the slow pace of banks foreclosing on mortgage arrears.

Earlier this week, Fitch lowered its ratings on Ireland's debt, blaming the unexpectedly high cost of banking bail-outs and an uncertain economic outlook.

The agency said it was cutting the rating to 'A+' from 'AA-' due to what it called the greater than expected costs associated with the Government's recapitalisation of the Irish banks, especially Anglo Irish Bank.

The agency has put a negative outlook on the rating, meaning a further downgrade is more likely over the next couple of years. Fitch said the negative outlook was due to uncertainty about the timing and strength of an economic recovery and efforts to cut the budget deficit.

Another drop in new homes registered

Figures from home guarantee scheme Homebond show that the number of new homes registered last month was down by almost 56% from September last year.

Homebond said 94 new homes were registered, down from 212 in September 2009. The Homebond figures are seen as an indicator of future housing activity. Homebond is the bigger of two companies which provide registration figures, the other being Premier.

Only nine new homes were registered in Dublin in the month, with 17 in Cork. There were no new homes at all registered in six counties.