Mr Mark FitzGerald yesterday said he agreed with the Economic and Social Research Institute's analysis of the problems in the Irish property market but not with its solution with regard to abolishing tax relief on mortgage interest.

Agreeing that the housing market does not need further "drivers of demand", the Sherry FitzGerald executive chairman argued that mortgage interest relief was not a significant issue at a macro level. But he contended that having this relief was important to many individual house buyers "at the micro level" and should not be abolished.

Despite an increase in supply, demand was still well ahead of housing supply and the gap is widening, he said. The Irish market was poorly supplied, with just under 300 houses per 1,000 people, compared with Britain, where there are 440 houses per 1,000 people.