House prices ‘to fall’ 18%

HOUSE prices are set to plunge by a further 18% according to one of the world’s top ratings agency as shares nosedive. This news comes as banks fell sharply on a day the ISEQ lost 3.3% following yet another turbulent day on the markets.

AIB fell almost 9% to €1.04 while Bank of Ireland plunged 14% to 76c. Irish Life and Permanent was down 4% to €2.18.

The airlines were mixed with Ryanair up slightly less than 1% to €3.20 and Aer Lingus falling 1% to 70c. CRH was down 3% to €17.60.

Moody’s does not expect the demand for credit in Ireland to increase until the labour market starts to recover in the second half of the year.

The ratings agency also said the first loss in a prime Irish residential mortgage backed security materialised in March.

It said 3.8% of the outstanding RMBS portfolios were more than 90 days “delinquent” in March, against 2.1% a year earlier.

Also, Standard & Poor’s Ratings Services maintained a negative outlook on Ireland’s debt, citing the potential for further rises in the country’s borrowing.

Across Europe, stocks retreated for the fourth time in five days, led by a selloff in basic-resource companies, as unco-ordinated attempts by policymakers to resolve the region’s debt crisis unnerved investors.

Stocks extended losses as the euro weakened against the dollar and US jobless claims unexpectedly rose, pushing the Standard & Poor’s 500 Index below its 200-day moving average.

National benchmark indices dropped in all 18 western European markets today, except in Iceland.

Britain’s FTSE 100 declined 1.7% and Germany’s DAX slid 2%. France’s CAC 40 fell 2.3%.

A top Federal Reserve official said Europe’s debt crisis poses a potentially serious risk to the US economic recovery.


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