Another solid year of growth was in prospect for Abbey, the house-building and plant hire company, helped by a reduction in interest rates in Britain and Ireland, the executive chairman, Mr Charles Gallagher, said after yesterday's annual general meeting.

The group has over 1,000 house units being developed in Dublin, Meath and Kildare over the next six months. Mr Gallagher said that house sales in developments in Saggart and Navan were ahead of target, while the latest 149-unit development in Leixlip would be launched shortly.

Mr David D'Alton, managing director of Irish operations, said he did not expect house prices to rise by more than between 2 per cent and 5 per cent over the coming year, as the market steadied. "The wildness has gone out of it," he said.

He said that 440 units in Swords would be coming on stream in about six months while about 500 units were being built in Navan. "We see Navan as a major growth area. It would be nice to see infrastructural improvement, but when you can sell a house at £30,000 cheaper, it pays for a lot of petrol," he said. The implementation of measures recommended in the Bacon Report had helped to take the speculation out of the market, and was settling prices.

"They have settled and in settling, it will not do us any harm in that land prices will settle. Land is our basic stock," he said.

Abbey made a pre-tax profit of £19.3 million in the year ended April 3th, compared to £9.1 million in the previous year.