Fearless borrowing often based on tenuous forms of income and low interest rates is a cause of great concern for the Irish property market, the Irish Auctioneers & Valuers Institute (IAVI) president has warned.

Mr Gerry Slattery expressed particular concern for new borrowers whom he said are often borrowing for a home based not alone on two salaries, but often on other forms of income and continued low interest rates. He told IAVI members attending it's a.g.m. yesterday that the property market has an "unreal air to it".

In this market young borrowers are being forced to chase after a scarce number of available homes, he said, with house prices being determined by "nerve", according to Mr Slattery. Demographic factors suggest however that this trend is set to continue for some time yet, with the demand for homes expected to continue to outstrip supply and drive prices even higher, he added. "While interest rates may improve affordability, regrettably they will also fuel high prices."

In the longer term though high prices are not sustainable, he said, predicting that pressures in the property market will eventually ease.

Already, there are clear signs that local authorities are responding to the need for more serviced and zoned land, and more flexibility in residential development, he said. Commenting on the estate agency business, Mr Slattery, urged members to act in the interests of their clients at all time and to treat potential buyers and tenants "fairly and openly".

He also called on the Government to urgently publish the report on house prices which has been compiled at its request by Mr Peter Bacon. The IAVI is the largest property organisation in Ireland, representing more than 1,300 members.