The credit ratings agency Standard & Poor's has said that Irish property prices will fall by 1% this year and will be flat next year.
In a note on the links between banks and the Irish sovereign, the ratings agency said it sees "some nascent encouraging signs in the residential property market", with recent evidence of price rises in Dublin.
However, because of the severe disruption to the property market, the agency does not factor into its analysis what it calls a "conclusive" bottoming out of the market this year.
The analysis does assume that house prices in nominal terms will be 1% lower in 2013 than in 2012, and they could be flat in 2014.
For commercial real estate, it sees valuations as highly asset-specific, with pricing for top quality assets showing resilience, but possible further declines for poor quality or badly located properties.
The agency is maintaining its rating at BBB+ with a negative outlook, but said it could remove the negative outlook if there was a deal to refinance the promissory notes on less onerous terms.
