Dealing with the pent-up demand for housing and continued growth in the population will require building 52,000 homes a year over 25 years, the Central Bank has forecast.
It has also calculated that if the Government wanted to reduce the deficit of homes over a decade and meet demand it would need to build almost 70,000 units per annum.
The bank says the shortfall in homes, which has resulted in thousands of adults living with parents or sharing rental accommodation, has built up over a decade during which house building lagged behind demand.
Speaking on his way into Cabinet, Taoiseach Simon Harris said said that the report's findings on pent-up demand were not surprising.
He said that the Government was committed to retaining the Help to Buy Scheme, and would also look at what is possible to further fund the Land Development Agency.
"It makes me all the more determined to look at how we can further support agencies and work on what we know is working (in housing).
"We are spending a serious amount on housing, amongst the very highest in Europe and that's right and proper, to catch up for that decade of loss due to the financial crash.
"I've been talking this summer about what we can do around infrastructure, what we can do about the sale from bank shares, indeed, what we can do with the Apple revenue, I think there's real possibilities here in relation to housing" .
Last year there were 33,000 homes completed and the Government has said more will be built this year.
The Central Bank has predicted there will only be 32,000 completed in 2024 before numbers begin to increase next year and the following year.
Mr Harris said that by the end of the year, the Government will set new housing targets for the second half of the decade.
The State significantly increased investment in housing from €1bn to €6.5bn a year, over the past decade, according to the Central Bank.
But it said that in order to catch up with demand there needs to be improvements in the planning system, an increase in the provision of serviced land and greater incentives for private industry to invest in development.
It also said due to the scars left on the building industry by the financial crash, there has been an underinvestment in machinery and equipment.
It said that construction was over-relying on small firms which do not have the economies of scale of bigger companies.
The Central Bank's director of economics and statistics Robert Kelly said: "We have calculated the significant economic costs of policy inaction prolonging the imbalance between housing demand and supply."
He added: "These will result in a higher cost of living, and in turn, a higher cost of doing business in Ireland, ultimately damaging our global competitiveness and the sustainable growth in living standards for the people of Ireland in the medium-term."
In tandem with publishing a report on housing, the Central Bank has also updated its economic forecasts.
They showed that domestic economy will grow by 2.4% this year and 3% in 2025.
The number of people in jobs will rise by 3.4% this year and unemployment will remain subdued at 4.3%.
Employment in the first half of 2024 increased by 47,800 with 47% of the rise accounted for by foreign nationals.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
