Irish house prices are likely to fall by another 20%, a new report published by Moody's Investor Services has warned.
"The steep decline in house prices since 2007 has placed the majority of borrowers deep into negative equity," it said in its latest assessment.
"Irish house prices have already fallen by 49.9% between September 2007 and April 2012,'' the report said.
''Moody's expects that house prices will fall a further 20% from today's levels (bringing the aggregate peak-to-trough fall to 60%)," it added.
Moody's said the performance of the Irish prime residential mortgage-backed securities market continued to deteriorate during the three-month period to April 2012.
According to Moody's, the 90+ day arrears trend on mortgage loans hit a new peak in the first four months of this year of 13.99%. It said the 360+ day arrears also shot up to 5.5% from 4.23% of the outstanding portfolios.
Moody's also said the Irish economy would only grow 0.2% in 2012. "In this weak economic recovery, it will be difficult for distressed borrowers to significantly increase their debt servicing capabilities and so arrears are likely to continue increasing,'' it cautioned.
