The Economic and Social Research Institute has said the Central Bank's mortgage lending rules should be modified to ensure more housing is built.
However, it also recommends that a modified rule would work to prevent an oversupply of housing, as happened during the last decade.
The ESRI supports the Macro Prudential rules the Central Bank introduced to reduce house price inflation and stop risky lending practices.
But it argues the policy should be implemented by a different type of rule that would ease borrowing requirements under certain conditions - such as now - and tighten them up if there were signs of trouble.
In particular it argues that the housing supply situation should be an explicit factor in setting lending loan-to-value and loan-to-income rules.
With housing supply not expected to meet the annual demand of 25,000 new units until 2018, the ESRI thinks tough rules now could hold back the supply of houses and apartments.
But it thinks the rules should automatically become harder, choking off credit, if there was a danger that builders started to produce more homes than the market could handle, as happened in the middle of the last decade
In its latest quarterly economic commentary the ESRI also says the number of mortgages in negative equity have now fallen below 100,000 for the first time since 2008.
It expects the economy to grow by around 5% this year.
ESRI Associate Research Professor Kieran McQuinn said the Central Bank's mortgage lending rules have had a tempering effect on house price inflation.
However, he also said the rules also had a negative on housing supply.
Speaking on RTÉ's Morning Ireland he said: "Certainly those measures in principle will have an effect on house price inflation but they will also have an impact on housing supply.
"In fact they would, if you like, result in a further contraction of housing supply or they would restrict the growth of housing supply because of the impact that they have."
He said we do not have enough supply at the moment and a broader view needs to be taken when looking at the Central Bank measures.