House prices - Still life in the Celtic Tiger yet

The OECD and the Central Bank recently suggested that Irish house prices were overvalued by 15%.

However, the Bank of Ireland property review predicted that prices will increase 10% this year and around 5% next year, even though interest rates are likely to increase by 1% early next year.

While the increase may dampen home loan demand, the bank predicts house price buoyancy, due to increased demand as a result of a surge in employment.