New figures today show that the number of housing commencements rose by 31.6% in the first quarter of the year compared with the same time last year.
The latest Housing Market Monitor, published today by Banking & Payments Federation Ireland, showed that 5,8000 housing commencements were registered in the first thee months of the year.
The Housing Market Monitor also showed that mortgage approvals and drawdowns both grew strongly in the first quarter, increasing by 9.2% and 8.9% respectively.
It noted that the volume of purchase mortgage drawdowns rose to its highest first quarter level since 2008.
The BPFI figures also revealed that cash sales accounted for an estimated 27.1% of sales on an annualised basis in the first quarter of this year, down from 31.2% a year earlier.
Meanwhile, residential property prices increased by 3.9% year-on-year in March - the lowest rate of annual growth in average prices since August 2013.
The BPFI said its latest Housing Market Monitor points to the need for a range of solutions and stakeholders to meet current housing needs.
Its economist Ali Uğur said that in recent years the private rented sector has been dominated by residential individual investors.
"BPFI mortgage drawdown data show that these individual investors accounted for around 20% of the value of drawdowns in 2006 during the peak of activity. However, since 2008, along with the decline in activity until 2013, the share of mortgages accounted for by residential individual investors declined significantly," the economist said.
He said the market is seeing increased activity by the non-household sector - which includes companies such as pension funds, specialist private rental firms and Real Estate Investment Trusts (REITs) in the domestic residential property market.
"This in a way shows that, to a significant extent, buy to let sector investors which have been traditionally individual investors have been replaced by institutional investors in the Irish housing market over the last 10 years, particularly in the new apartment sector," Mr Uğu said.
He said that while the latest figures shows signs of progress on housing supply, significant challenges remain.
"Given different segments that make up the housing market from a demand perspective and the needs of these different segments, it is important to recognise that we need a number of stakeholders, both from the private and public sector, to play a role in addressing the nation’s housing needs with perhaps a different product mix varying according to needs, from houses to apartments and purchase to rental," the economist added.