House prices may fall by as much as 8 per cent in 2008 following a 5 per cent decline this year, according to a report by Goodbody Stockbrokers.
As a result of slowdown in the housing market Goodbody cut its economic growth forecast to 2.5 from 3.1 per cent for 2008. The brokerage expects Gross Domestic Product to expand by 4.9 per cent this year.
Dermot O'Leary, chief economist with Goodbody Stockbrokers, noted that builders were responding quicker than expected to the housing slowdown.
Irish housing registrations, a proxy for housing starts, fell by about two-thirds in October from a year earlier.
Mr O'Leary predicted that just 50,000 homes would be completed next year, 10,000 lower than his previous forecast.
He said, however, that econmic growth would most likely rebound to 3 per cent in 2009 as the housing market stabilises.