Taoiseach Enda Kenny does not accept there is a property bubble following the release of new figures which show a 24 per cent increase in property prices in Dublin over the past year.

Mr Kenny said the significant increase in property prices in the capital over the past two years was down to a number of other factors.

“There is a significant increase in prices in Dublin but it is coming from a very low base. The [increase] is being driven by the law of supply and demand.”

The Taoiseach, who was responding to questions at the launch of the latest quarterly report on the Government’s Action Plan on Jobs, placed a huge emphasis in his comments on the need to build new houses. He intimated that it would have a two-fold effect, that of creating employment in the construction sector and also of satisfying the demand for houses, particularly in the Dublin area.

“You cannot sort this out without building new houses. You need a strategy,” he said.

Mr Kenny instanced a number of initiatives that the Government would be taking to address the matter. He said that he and Tánaiste Joan Burton had focused on housing as a major priority when drawing up the recent programme for the remainder of the Government’s term.

He said Nama would be making lands available in Dublin’s docklands for new housing; that a commitment had been made by local authorities in Dublin to make available the 18,000 units in Dublin that had been boarded up.

Mr Kenny also said that Part V of the Development Act, which provided that 20 per cent of each development must be earmarked for social housing (but has never been effective in practice) would be reviewed and that Minister for the Environment Alan Kelly and the Minister of State Paudie Coffey would be looking at ways to increase the annual output of new social housing to 13,000 to 14,000.

When pressed on when the impact of these Government-side actions would be seen, Mr Kenny said he expected it to take 18 months or so.

But he said there were positive signs too, with indications that new house builds nationally could be as high as 15,000 this year, compared to 8,000 in 2103.

“At the end of the day we have to build more houses,” he said. “What we want is quality and affordable homes.”