Continuing unsustainable house price rises are the single greatest domestic threat to the economy, according to the head of research at Goodbody Stockbrokers.
Mr Colin Hunt today told the Irish Association of Pension Funds (IAPF) conference today that of house prices do not "moderate to [between] 5 to 7 per cent over the next year then we could see a property crash which would have major implications".
On the evidence so far that year this is not happening as the rate of lending for new mortgages continued to show strong growth in January and February.
"Early indicators in the first quarter of this year suggest that house price increases remain far in excess of this rate," he said.
According to Mr Hunt house price inflation remains the one sector of the economy that has not seen a cooling in growth rates. The economy as a whole was easing from a 10 per cent growth rate to close to 4 per cent which was leading to a moderating pressure in terms of wages, inflation and Exchequer spending.
However, he added that the bust-free boom of the late 1990s was "rewriting economic text books" and the jobless economic recovery in the United States would generate employment as the cycle unfolded.
