International credit rating agency Fitch says it now expects property prices in Ireland will fall by 60%.
It previously forecast that houses and apartments would half in value compared to the peak levels in 2007.
Fitch also says the speed at which mortgage arrears are increasing is unlikely to slow in the near future.
Last week the Central Statistics Office (CSO) published figures showing that property prices around the country have dropped by 50% since 2007.
Today Fitch has revised its outlook for the Irish market.
The credit rating agency also notes there has been a sharp increase in mortgage arrears since its last report in August 2011.
It says the delay in Irish economic recovery, the austerity measures and falling house prices mean the speed at which arrears are increasing is unlikely to slow in the near future.
Fitch says it will review the situation once the new personal insolvency laws and increased forbearance measures from government take effect.
It expects these will influence both property values and the arrears issue.
