The Minister for Communications said the Government wants to tackle the "worrying" rise in Dublin property prices.
Pat Rabbitte made the comments on the way into a special cabinet meeting to discuss ways to stimulate the construction sector.
Ministers are expected to consider measures aimed at tripling the number of family homes built every year, and create up to 60,000 new construction jobs.
Rabbitte said there is a clear lack of family homes in Dublin, and the Government must address the issue.
"There is a housing demand I this city again - prices are rising before our eyes at a worrying level," he said.
"There is a problem about supply. The demand is undoubtedly there."