The Construction Industry Federation says 2012 was a record low for house building and expects this year to be lower again.
New CIF figures reveal that fewer than 8,500 homes were built last year, the majority of which were once-off houses or the completion of unfinished estates.
Records on house building began in 1970 and just under 14,000 houses were constructed that year.
That figure was the lowest on record until last year.
Dublin, Cork and Galway recorded the highest number of house completions.
The CIF says the ESRI estimates that 15,000-20,000 new homes need to be built every year to meet future demand.
It is concerned about the impact that six successive years of decline will have in years to come.
The federation says if banks keep their promise to provide more credit it could help stimulate demand, particularly in areas where vacant stock is low.
CIF Director Hubert Fitzpatrick said the number of vacant houses in urban centres and in Dublin, in particular, had almost halved in the last five years and was not being replenished.
Speaking on RTÉ's Morning Ireland, he said: "We don't have any new build that's creating additional stock in the areas where people want to buy it."
He said the number of people renting had doubled in the past five or six years.
