The ESRI says the Central Bank's strict new mortgage rules could damage confidence in the property market.
It says the guidelines - which will force house buyers to save a 20 per cent deposit before being granted a mortgage - should be more flexible and mirror trends in credit and supply across the sector.
The comment comes in the ESRI's latest quarterly forecast - which predicts the economy will grow by 4-and-a-half per cent next year.
But economist David Duffy says the Central Bank should re-think the 20 per cent rule - he says it could hit confidence among builders and buyers.
