The head of the Central Bank, Patrick Honohan, has admitted that new mortgage rules will make it harder for first-time buyers to get a home.
However, Mr Honohan says the new rules are needed anyway in order to stop previous mistakes from being repeated.
Many banks say most of their first-time buyers would not have been approved for mortgages under the rules coming in next year.
Governor Honohan says the rules are designed simply to stop people taking out loans they will never be able to afford.
He said: "Excessive reliance on mortgage credit, and this is the experience in the United States which was imitated by us, the opposite is the effect.
"It actually can create situations where too many people borrow too much and get into ferocious financial difficulties.
"We know that, but we have to think of it in terms of the future as well."