FINANCE Minister Michael Noonan has hit back at the international ratings agency which predicted a further fall of up to 20pc in house prices.
Suggesting that the Fitch agency was out of touch with the Irish market, Mr Noonan said the firm had produced no evidence to back up its claims and had accepted that the Irish property market could come back more quickly than expected.
Fitch said that weak mortgage lending as well as pressure on people's incomes and confidence levels could lead to a 20pc decline in house prices from current levels.
But Mr Noonan said the ratings agency had delivered a "pretty ambiguous kind of assessment" of the Irish housing market.
"They didn't bring forward any evidence and in the full statement they (said) they could be wrong and that ... the Irish property market could come back quicker than they anticipated," he said.
Since the bursting of the property bubble, prices have dropped by 50pc, to take the average value to €160,000. Another 20pc fall would take the average price nationally to €128,000.
But Mr Noonan said the evidence was that the banks were issuing a significant number of mortgages at the end of last year. He also said that there had been a significant amount of transactions, with 21,000 houses sold last year.
The Finance Minister said the recent announcements over the past 10 days -- such as the sale of €2.5bn in government bonds and the higher-than-expected tax returns for December -- would help to reinforce the "confidence factor" in the economy.
Experts are still awaiting the impact of the forthcoming property tax and the scrapping of mortgage interest relief on the property market this year. In the most recent Budget, Mr Noonan announced a three-year "property tax holiday" for those who buy new and secondhand homes this year.
According to the most recent figures from the Central Statistics Office, there was a slight jump in house prices last November, which were up 1.1pc on the previous month. But overall, house prices fell by 5.7pc in the year to last November.
In its global housing report, Fitch said there were too few mortgage lenders active in the market, while those that were lending had major issues with arrears.
But despite that, the report noted: "The first-time buyer market offers some small hope."