Allied Irish Banks PLC's CEO said the mortgage market in Ireland will be smaller than expected in 2018, Reuters reported Oct. 17, citing an Irish Times podcast.

However, the shortfall will be offset in the medium term as buyers are able to access new residential properties, Bernard Byrne said.

The new mortgage market was expected to reach €9 billion in 2018 from €7.3 billion in 2017, Byrne said.

"The medium-term position, on the other hand, has been uplifted in terms of expectations. Rather than being a €10 billion to €12 billion market in the medium term, I think it's closer to a €15 billion market. That’s on a three- to four-year basis," he said.

The shortfall exists because new homes are not being built and lending rules aimed at controlling price inflation are cooling the market, according to Byrne.