People can still afford to buy houses in Dublin, Minister of State for the Environment Noel Ahern insisted.
He said that increasing house prices and mortgage interest rates meant that a greater proportion of disposable income was now needed to meet mortgage payments.
"Despite this, affordability, both nationally and in Dublin, remains within the affordability limits now typically applied by lending institutions in deciding mortgage applications."
He said that his affordability index reflected the position, at the end of March, for a couple on a combined income of just under €76,000, based on the average industrial and non-industrial wage.
The mortgage outgoings of such a couple represented about 29 per cent of their disposable income, and the ratio would be lower if account was taken of the longer loan periods which were now on offer.
Pádraic McCormack (FG, Galway West) said a report had shown that key public workers, including gardaí, teachers and nurses, were being priced out of the housing market in four of the five largest cities in the State.
Suggesting that a special unit be established in the department to deal with the matter, Mr McCormack said it should tackle changing the stamp duty regime whereby first time buyers, buying houses costing more than €317,500 were subject to the full amount of stamp duty.
"Between all charges, those buyers are paying the Government up to 50 per cent of the cost of the house.
"Stamp duty alone adds from €20,000 to €40,000 to the price of the house for a first time buyer."
Mr Ahern said that stamp duty rates were set by the Department of Finance and there was no point in going into that.
