The property market in the Republic is not in a "bubble" and the chances of collapse are limited, the chief executive of Danske Bank, the new owner of National Irish Bank, said yesterday.

Addressing a Hamilton Osborne King conference in Dublin, Peter Staarup said that as long as a housing market is underpinned by three key trends, bubble is "the wrong word" to use.

First, he said, the Republic has low interest rates. "This has obviously supported house prices," he said.

Mr Staarup also acknowledged, however, that the next decade would not bring the same trend of falling rates.

"And with the combination of house prices at record highs and rates now looking like they are on the upward turn, the danger for many is that they will find it difficult to manage the first rate increases in over five years," he said.

Mr Staarup's second trend is a combination of "financial innovation" and "financial liberalisation".

"The price of borrowing has come down and the range of financial possibilities has broadened. This trend might have some way to go yet," he said.

Thirdly, Mr Staarup highlighted increased urbanisation, which he said means richer and better educated people tend to want to live in cities.

"It is especially the price of the right to live near a city centre that has gone up as much as the price of the actual houses."

Mr Staarup said this trend was unlikely to reverse and could continue for some time.

"As long as the housing market can be explained by [ these] three trends - and I think it can - then 'bubble' is the wrong word, and the risk of a sudden collapse in the housing market is limited," he concluded.