Fianna Fáil has warned there is a real danger of house price inflation after the Central Bank's decision to remove the cap on mortgage lending for first-time buyers.
The party's environment spokesman said 95% mortgages are back in town.
Speaking during Leaders' Questions in the Dáil, Barry Cowen said this is the result of the bank's changes coupled with the Government's assistance scheme for first-time buyers.
However, Tánaiste Frances Fitzgerald insisted the changes would allow first-time buyers to get on the property ladder.
She said it was a dramatic change that would lead to a surge in home building.
The Tánaiste said it was a welcome move for a large number of people but said its effects would be closely monitored.
Yesterday the Central Bank announced that it is remove the €220,000 cap on mortgage lending for first-time buyers who have a deposit of 10%.
But it said it will act if there is a "rapid increase in house prices".
Central Bank Governor Philip Lane said he decided to alter the mortgage rules in response to rising house prices and higher incomes.
He said the measures were designed to ensure there was financial stability.
Earlier, Minister for Housing Simon Coveney said the Central Bank move was the right decision.
He said first-time buyers in Dublin looking to buy a €300,000 house needed a €38,000 deposit but that will no longer be as high.
Speaking on RTÉ's Morning Ireland, Mr Coveney said the bank is not changing the lending ceilings that are there to prevent people over borrowing and the link to income remains.
He said the changes announced by the Central bank will add to the confidence now building in the construction sector that if they build affordable homes first-time buyers will be able to get mortgages.
Meanwhile, AIB CEO Bernard Byrne said that prices for first-time buyers are likely to rise in the short term, but the revised mortgage deposit rules will help remove blockages in the market.
Lorcan Sirr, a lecture in housing at the Dublin Institute of Technology, also said he believes the Central Bank rules on mortgages for first time buyers will result in a rise in house prices.
Mr Sirr said people will also be getting themselves further into debt should they avail of the 10% deposit.
He said the price of houses needs to be addressed.
He also said that while he was surprised by the Central Bank changes, the move could instil confidence in the construction sector.
Banks should now be more amenable to lending money to developers, he added.
The lecturer also said that Government policy seems to be geared towards the first-time buyer, neglecting those in negative equity and those who are renting.