A Government plan to help people get a mortgage is looking at the issue 'from the wrong side', according to lobby group Property Industry Ireland (PII).
The comments from PII head Peter Stafford follow a new report from AIB which shows that three-quarters of people looking at property want to buy in the next six months, and more than half have set themselves a budget of €350,000.
The government last week unveiled a mortgage insurance scheme to help first time buyers get a mortgage.
Under the scheme, a portion of the mortgages to first-time buyers of new houses will be guaranteed by the State, in order to allow banks give out more loans.
However Mr Stafford said it is not the way to address the situation.
"Back to this idea of people sitting in their halls with their bags packed, wanting to move in the next six months - they need somewhere to live," he said.
"It's a supply side problem.
"Making more money available for houses which don't exist seems to me to be looking at the equation from the wrong side."