A new report says an upward property cycle is beginning in Ireland and building needs to begin in the east of the country now.
Goodbody Stockbrokers claims the market has now passed the bottom and is in a gradual recovery phase.
However, it warns of a multi-speed recovery, with urban areas like Dublin recovering much faster than others, and it says up to 26,000 new units will be needed by 2021.
The Government said work is underway to address a possible shortage of homes in the capital by the end of next year, while Brian Hayes, the Junior Minister for Finance, said it may be considered "bubble territory".
Chief Economist with Goodbody's Dermot O'Leary, however, said that the increase in Dublin prices are not yet indicative of another property bubble.
"I wouldn't say there's a bubble in the Dublin housing market, but I would be concerned about a 10% rise on an annual basis," he said.
"We have to remember that prices have halved - more than halved in some cases in Dublin, so we're still significantly down from the top. But if we are to have sustainable recovery in the market, price rises need to be accompanied by an increase in supply."
"If we're to avoid bubble-type price rises on an annual basis … I think we have to recognise private sector market failure … NAMA is the obvious agency to do that."
The Chairman of NAMA, however, said the agency is already funding construction in Dublin and Cork, without interfering in the market.
Speaking at a Construction Industry Federation conference earlier, Frank Daly said there is only three to four months of positive development in the market, and the industry should "remain calm about it."
His comments follow yesterday's Property Prices Index from the CSO, which showed a 10% increase in prices in Dublin, and a fall elsewhere in the country.
