Report points to overcorrection of house prices

A new report has stated that Irish house prices have overcorrected by between 12-26%.

The Central Bank research says the severe downturn in the property market in Ireland is one of the largest and protracted across the OECD.

The research cites a lack of investor confidence, negative future house price expectations, the uncertain macroeconomic outlook and mortgage credit availability as the main reasons for the decline.

This report - which examines why Irish house prices are still falling - states that by last year the value of residential properties had dropped by almost 50% since the peak levels of 2007.

The fall is one of the most significant in the OECD based on over 40 years of data, and the report warns that a revival of the sector appears to still be some way off.