Europe monitoring price surge for signs of trouble
The European Commission has warned it is closely monitoring house prices in this country.
It comes after prices in the first three months rose at their strongest rates since the peak of the boom in 2007.
Commissioner for Economic and Financial Affairs Pierre Moscovici has confirmed in a letter to Brian Hayes MEP that the commission is closely monitoring property value movements here.
It said it will examine the issues as part of the commission's post-bailout surveillance mission, which takes place this week.
It is expected the EU Commission will closely examine the controversial help-to-buy scheme.
The Government's help-to-buy scheme became operational in January. It offers a tax rebate of up to €200,000 to first-time buyers.
The International Monetary Fund (IMF) said this month that the help-to-buy scheme for first-time buyers is pumping up demand in the property sector.
Prices rose close to 10pc in the year to March, after an increase of 0.1pc in the month, according to Central Statistics Office figures.
Mr Hayes said: "Commissioner Moscovici has made it absolutely clear that the Commission considers the rising levels of house prices in Ireland a significant threat to the stability of our economy."
He added that this week sees the start of the seventh post-bailout surveillance mission to Ireland.
"It is very likely that housing will be the main issue of focus. Housing supply will be a persistent problem for many governments to come and we need to use all the expertise we can get to resolve it.
"Mr Moscovici has rightly said that the only durable way to address the lack of affordable housing is to build an adequate supply."
Mr Hayes said the Government's 2020 housing strategy is tackling this issue but it will obviously take time for new builds to be completed and to address persistent housing supply bottlenecks.