The chief executive of AIB has said that house prices would only fall once supply overshoots demand, which he estimated to be in around two to three years time.

"We are probably - and this is a guess - two to three years away from supply getting ahead of demand and then it's going to have overshoot annual demand in order to meet that pent up position," Bernard Byrne told an Oireachtas Committee.

Mr Byrne said the estimated 20,000 new units coming on stream at the moment was not enough to satisfy demand which he estimated at probably around 30,000 units.

He said the bank supported the current Central Bank lending rules, adding that they were "appropriate". 

"Way too many properties are being sought versus the supply and the only thing that happens is prices go up which isn't helpful to anyone," he said. 

In his opening statement to the Oireachtas Finance Committee, Mr Byrne said the lack of housing supply in the main urban areas was one of the main infrastructural difficulties facing the country, from a social and economic viewpoint. 

He said they had "ramped up activity in the bank's development lending sector and we are the primary bank to many of the country's largest development groups".

He said that in addition to providing real estate finance, they were also facilitating social and affordable housing. 

The AIB boss also told the committee today that all impacted tracker mortgage customers across more than 30 individual groupings in the bank have been identified, contacted and restored to their correct interest rates.

They also also been paid redress and compensation.  

Mr Byrne said the final group of outstanding cases, who are EBS customers, will have their rates rectified by the end of this month and be compensated by the end of September.

Mr Byrne also apologised to customers for distress caused. 

"We regret that AIB customers endured financial loss and emotional distress where the bank failed its contractual obligations or its requirement to provide proper levels of transparency and information," he said. 

He also acknowledged to the Oireachtas Finance Committee that the Central Bank would be the arbiter in deciding when the matter is complete. 

"We will also remain ready and open to address any other cases should they emerge," he added. 

He said that when the problem come to light, AIB acted "swiftly and in good faith to launch a major programme of work involving approximately 500 people deployed to implement fair settlements, as quickly as possible".

The Committee was also told that the bank's Non-Performing Loans (NPLs) level is currently running at 14%, with a target date of the end of 2019 to reduce levels to European norms of approximately 5%.  

"We are determined to push on with the case-by-case resolution process and continue to have circa 1,500 people working with customers in difficulty across the country," the AIB CEO said. 

"Our clear preference has always been to provide solutions on this individual basis, to right-size customer debt to sustainable levels. But we must be realistic; we have made great strides but we still have much to do," he added. 

Mr Byrne also said the uncertainty around Brexit, the slowdown in UK economic activity and the strength of the euro against sterling, present potential challenges, despite GDP growth forecasts.  

"While many of our customers have been diversifying their export base quite significantly in recent years, the impact of a downturn in the UK would almost certainly impact their performance," Mr Byrne said.