House prices are set to rise by 5% in Ireland over the next 12 to 18 months, according to new research from ratings agency Moody's.
The rating agency said that the lack of supply, along with the Government's help to buy scheme and the relaxation in the Central Bank's mortgage lending restrictions, should see prices being pushed up again in the year ahead.
Moody's noted, however, that borrowers in long-term arrears (720 days or more) and those in negative equity are still high.
But it added that the average amount of negative equity per borrow has fallen sharply, down from 17% at the trough to around 6% now.
Today's research said that the favourable economic environment here and the related recovery in house prices have improved Irish banks' asset quality.
"However, the level of non-performing mortgages remains high, and loans in long-term arrears make up the majority of the total, posing tail risks for Irish banks," Moody's stated.
