House prices are likely to keep rising despite plans by the Irish Central Bank to restrict mortgage lending this year, according to estate agency group Sherry FitzGerald.

The trend of continuing price rises will be particularly evident in Dublin and other urban areas, the firm said, adding that demand for property is recovering and there is economic growth in the region.

“There is every reason to believe that prices will continue to rise at above trend levels in the short term in many locations,” the company’s chief economist, Marian Finnegan, told the Irish Independent.

But she said that the plans this month by the Central Bank to limit mortgage lending meant there was uncertainty about how the property market would perform. The Central Bank has proposed bringing in new rules that would force most home buyers to put down a 20% deposit. Also, the amount lent would be limited to three-and-a-half times the annual salary for the majority of buyers, under proposals outlined by the Bank before Christmas.

The Central Bank is currently assessing submissions on the proposals and is due to announce this month whether the rules will be outlined as initially proposed.