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PROPERTY prices could fall by 55pc from their peak to their lowest point, according to an economic scenario published by the Central Bank.

Under a worst-case scenario they could even fall by 60pc.

The assessment has been published as part of economic outlooks ahead of a capital review of banks which will be released at the end of the month.

The Central Bank's stress tests -- or prudential capital assessment review (PCAR) -- cover the three years from 2011 to 2013.

The outcome of the 2011 review will be published on March 31 and is being applied to AIB, BoI, Irish Life & Permanent and the EBS.

The tests will look at a worst-case scenario where the Irish economy will shrink by 1.6pc in 2011 and grow by just 0.3pc in 2012 and 1.2pc in 2013.

It also looks at how the banks will manage if house prices fall by 17.4pc this year and by 18.8pc in 2012 and if unemployment rises to 15.8pc in 2012.

The Central Bank said the European Banking Authority (EBA) will announce macro economic scenarios for its stress tests of European banks tomorrow. The EBA stress test covers this year and next.