Ratings agency Fitch expects house prices in Ireland to decline by a further 20% from current levels.

In its latest residential mortgage briefing Fitch outlines what it refers to as "substantial concerns" for the peripheral eurozone markets of Spain, Portugal, Greece, Ireland and Italy.

"Fitch anticipates depressed mortgage lending, continued declines in house prices and pressure on incomes and consumer confidence," it said.

The agency, however, has given itself room for error in its forecasts, saying that its assumptions are conservative and that property prices in Ireland may stabilise sooner than its "base case assumption" suggests.

Fitch said that access to mortgage lending will continue to hamper property markets in a number of countries, including Ireland.

"Banks maintain strict underwriting guidelines and are strongly restricted in their willingness and ability to lend, especially in peripheral eurozone countries," it said.