The property market is still in freefall according to the ratings agency, Moody’s, which is predicting house prices will fall a further 20%.
Research by Moody’s into the performance of the Irish prime residential mortgage-backed securities has found that the number of mortgages in arrears of more than 90 days and more than a year have reached a new peak of 13.99% from 11.98%.
Based on these figures Moody’s predicts that the steep decline in house prices since 2007, that has placed thousands of home owners in negative equity, is set to continue.
“Irish house prices have already fallen by 49.9% between Sep 2007 and Apr 2012 and Moody’s expects house prices will fall a further 20% from today’s levels (bringing the aggregate peak-to-trough fall to 60%),” the agency said.
Moody’s outlook for Ireland is for very modest growth of 0.2%, and believes these low growth levels mean homeowners will not be able to service their loans. The ratings agency foresees a continued increase in people falling behind on their mortgages.
“In this weak economic recovery, it will be difficult for distressed borrowers to significantly increase their debt-servicing capabilities and so arrears are likely to continue increasing,” it said.
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