Ireland's property market is on track for a soft landing this year, and its construction sector will remain strong due to investment in infrastructure, the governor of the Central Bank said today.
"The construction sector is still very, very strong," John Hurley said in Dublin, adding that although the building of houses was set to gradually reduce over time there was still an infrastructure deficit to be addressed.
"We have to continue to build our infrastructure to catch up with the European mainland, and that means that we have to spend twice the area average," said Mr Hurley, who is also a member of the European Central Bank 's interest rate setting council.
"So our construction sector is going to continue to remain strong," he added.
Mr Hurley said the Central Bank of Ireland expected the average percentage increase in house prices this year to be in "low single figures" and that its forecast had not changed after data showing the second month-on-month decline in a row in April.
"Looking at the situation as a whole it seems to us that low single figures are the most probable," he said.
According to the Permanent tsb/ESRI house price index, national house prices in April were up 5.1 per cent year-on-year, down from 7.4 per cent in March.
"Low single figures for us is a soft landing in 2007," he added. "Parallel with that we're then seeing a reduction in growth in credit levels, and this is also very, very welcome."