Property consultants Savills have welcomed the decision by the European Central Bank to lower interest rates to 0.15%.

Dr John McCartney, Economist and Director of Research at Savills Ireland commented that the lower rate should help to underpin demand in the residential market;

"Cash sales became an increasingly important part of the market in recent years, but this has begun to reverse again over the last twelve months.  Therefore, the cost and availability of credit will have more of an influence on market dynamics this year as the traditional mortgage-financed buyer comes back to the fore."

However, Dr. McCartney warned that more development of new homes is required to meet increased demand.

"Affordable mortgage credit is a necessary component of a properly functioning housing market. But this is of little help if there aren't enough properties being brought to the market. Currently there is a severe shortage of stock in many areas of Dublin and it is to be hoped that today's interest rate cut will add to the supply of development finance and facilitate much needed home-building".