House prices here are set to continue falling for another 12 months and will, by then, have tumbled 45pc from their peak in 2007, according to National Irish Bank (NIB) chief Andrew Healy.

Speaking to the Irish Independent, Mr Healy expects a further 10-15pc fall in house prices up to the middle of next year before they stabilise.

"Official figures would suggest that house prices have already fallen by about 20pc from their peak, but the reality is probably that they've fallen about 30pc," he said.

"The property market is paralysed".

He added that NIB's residential loan book continues to perform robustly, with just 68 customers more than 90 days in arrears with their repayments.

Only 112 customers are currently over 30 days in arrears.

Mr Healy also defended the bank's record on lending, noting that it continues to approve four out of five loan applications.

A recent survey criticised foreign lenders in Ireland, including NIB, Royal Bank of Scotland's Ulster Bank, and Halifax/Bank of Scotland of charging customers more than indigenous institutions for mortgages.

Mr Healy said that 75pc of NIB's mortgage customers have advantageous tracker rates, and elsewhere NIB has adjusted its pricing "in line with risk".

The economy will also bottom out in the first half of 2010, Mr Healy predicted.

IRISH INDEPENDENT, John Mulligan