An AIB report released today said despite regular speculation about the risk of a crash, the Irish housing market exhibits no signs it is about to burst.
AIB Global Treasury's report said that while the housing market has seen a buoyant start to the year it expects the strong supply will exert some downward pressure on house price inflation.
The report expects over house price inflation to slow to around 7 per cent by the end of the year. However, the market remains vulnerable to any withdrawal by investors.
AIB expects housing demand to run at 62,000 per annum over the 2002-2006 period before easing to 52,000 in the period 2006-2011.
Meanwhile in it's quarterly economic outlook, AIB Global Treasury said it's outlook was upbeat and predicts the economy's medium term growth potential to be at 5 per cent.
Real GNP will expand by 3.5 per cent in 2004 and by 4.3 per cent in 2005 according to the report.
It forecast inflation to steady at around 2 per cent over 2004-2005 period.
However, the report did warn there might be a slight rise in unemployment, to close on 5 per cent for the year end, due to the strength of growth in labour supply.