The chief executive of Ireland's biggest mortgage lender admitted today the rapid pace of house price growth had become a problem but that rising interest rates should ensure a more reasonable rate of growth.
Denis Casey, chief executive of Irish Life & Permanent's permanent tsb banking division, said: "There's a general acceptance now that house price growth is a problem," adding that double-digit house price inflation this year appeared likely.
Mr Casey said a more reasonable rate would be around 5 per cent.
But he added that he expected three further 25 basis-point interest rate hikes from the European Central Bank this year, which, he said, would begin to slow the pace of growth.
"We think that this year new business will probably be up 25 per cent, but I think the risk to that is on the upside, not the downside," he said.
Growth last year was 28 per cent but Mr Casey said he expected a slip to 15 per cent in 2007.
Having spoken with developers, he said he expected builders to complete even more houses this year than the record 80,957 achieved in 2005.