It is not viable to build so-called affordable apartments due to the cost of construction, according to a report from the Department of Housing.
The report finds that the profit margins on apartments worth €240,000 to €320,000 are too slim.
However, a housing expert has questioned the figures in the report leaked to the Irish Times, saying they appear to have risen astronomically in two years.
Government sources said builders would have to get a profit margin of 10-12% to make it viable, but the profit on an apartment could fall short of that at the moment, whereas they could make a profit just above that level when building a house.
Lorcan Sirr suspects that the department got its information from builders, rather than from independent sources.
He said: "It will be interesting to see how the department got the figures. What is really interesting is that two years ago, less than two years ago, the department also did some research into the cost of building an apartment and discovered that it was on average around €230,000.
"So, I'm really curious to see how the cost of building an apartment has gone up by €90,000 when construction costs have only risen by about 7%."
Head of the Construction Industry Federation, Tom Parlon, says there are too many costs associated with building apartments.
He said: "Less than 45% of the final cost is actually for bricks and mortar.
"So then you look at the other big ones, the site cost is substantial and new different initiatives now, whether it be site levies or whether it be anti-hoarding taxes. We just have to see how they are going to work."
Mr Sirr agrees that the cost of land is prohibitive, but wonders if next month’s budget will address this.
He said: "I think what we'll see in the Budget are probably some carrots again thrown to housebuilders to encourage them.
"But again the issue isn't necessarily the number of houses, the issue is the price they'll be sold at."