Estate agents DNG have warned that not extending the help-to-buy scheme could have a major impact on the housing market in the coming years.
Currently, the scheme is due to expire at the end of the year and it is unclear whether Finance Minister Paschal Donohoe will extend it.
In its Half-Year Residential Market Review, DNG described help-to-buy as "a vital incentive" that is needed by a huge number of first-time buyers trying to get on the property ladder.
The incentive allows people to claim back income tax paid over the past five years up to a maximum of €20,000 or 5% of the price of the property.
In its report, DNG states that since it was launched two years ago, 44% of new home sales to private buyers have used help-to-buy.
Keith Lowe, chief executive of DNG, urged the government not just to retain the current help-to-buy scheme but to expand it to encourage greater activity in the market.
"For the last five years, DNG has sought the introduction of an enhanced Help to Buy Initiative, in the form of a Shared Equity Scheme loan and have made a number of submissions to the Department of Finance without success," he said.
This scheme has been operating in the UK for the last six years and has led to a sharp increase in construction numbers, especially in London, where the scheme has been extended multiple times.
Mr Lowe said that, in general, there is "increased confidence levels in the market" and that prices have entered a period of "stabilisation". In Dublin, price inflation was just 0.1% in the first half of the year. In the last 12 months, inflation has been 0.4%.
"This is good news for buyers and the market," Mr Lowe said.
He pointed to the Central Bank rules, which limit lending, and an increase in construction activity as the reasons for this.
The number of transactions in the first quarter of the year was "more or less identical" to the same period last year, he said, adding that the end-of-year total is likely to be "marginally ahead" of the 2018 total.
In Ireland, there is an average of 2.4 sales per thousand people. In the UK, the figure is 3.9 per thousand.
"This is a little disappointing as it indicates that the market is still in recovery mode," Mr Lowe said.
He added, though, that prices in the €1-2.5m range have "noticeably increased" this year.
DNG's analysis of the market reported that there was no major increase of new home completions sold in the open market in schemes of more than three homes in Dublin, Cork, Galway or Limerick, but it is expected that this will change as the year goes on with many schemes due to be completed later in the year.
This will have a further impact on price changes, Mr Lowe added.
"We predict that property prices will rise by an average of 2% to 4% this year which would be a good result for the market. The Central Bank rules, which do require some relaxation, are certainly doing what they were designed to achieve, and without them, prices would be rising at double-digit rates which would not be sustainable. Brexit still remains a market risk the effects of which are difficult to predict," he said.