The head of the Construction Industry Federation (CIF) says house prices need to increase in order for the building of residential properties to become more cost effective.
Tom Parlon says it's currently not viable to build a house for the price they are selling at.
The comments come following the release of figures today which show that the number of planning applications and new builds are down on 2013 levels.
Tom Parlon says builders are struggling to make a return on the building of houses.
"Cash is very scarce," he said. "Small builders or big builders - they don't have cash any more.
"It's extremely difficult to get working capital from the banks, and the cost of houses - for a builder to do his sums at the moment, when he adds in the cost of building the house, the development levies, the part 5 contribution…
"When you add on all the costs it is in many cases not viable to build a house for the current price."