House prices are "substantially lower" than they were 14 years ago - the problem is people cannot get mortgage approval, Leo Varadkar has said.
Questioned about the latest Central Statistics Office (CSO) figures which show the cost of apartments and houses rose by 4.5% in the year to April, the Tánaiste said property prices are still below Celtic Tiger levels.
The Central Bank has warned the trend of rising house prices is set to continue due to the impact of Covid on new house building and the built-up savings of some households.
Sinn Féin Dáil deputy leader Pearse Doherty said the Government "simply doesn't get it" and called for a doubling of capital investment in housing in the next Budget.
"You simply don't understand the level of anger that's out there," Mr Doherty told the Tánaiste.
Mr Varadkar acknowledged the rise in house prices, but said 65% of Irish people own their own home, which is one of the highest rates in the developed world.
"The problem we face is that that's not a reality for the vast majority of younger people today, and by younger people I don't just mean people in their 20s and 30s, I also mean people in their 40s."
CSO data issued this week shows the median age of a single person buying their own home is now 42, up from 34 a decade previously.
Mr Varadkar said the Government wants to "turn that around and make homeownership a reality again", adding that Central Bank rules have put a "lid" on house prices, but have caused rents to soar.
He said it's a "real paradox for a lot of people that houses are cheaper to buy than they were 14 years ago, but people can't get mortgage approval.
"They now end up paying more in rent than they would do if they were able to get an adequate mortgage."
He welcomed Central Bank's ongoing review of this policy.
Meanwhile, the establishment of a State-owned construction company to speed up the delivery of social housing has been ruled out by Minister for Public Expenditure and Reform Michael McGrath.
Mr McGrath said an unprecedented amount is now being spent on capital projects, however, he said: "The establishment of an overarching State construction board is not envisaged at this time."
He told the Dáil: "We certainly need to increase housing supply, not just from the State but from the private sector.
"Capital expenditure is at an all time high in the history of our State, with a commitment to maintaining and further increasing this over the lifetime of the Government."
He said that overall the level of capital expenditure this will will reach almost €11bn when capital carryover from last year is included and this will be "at the heart" of the recovery from Covid.
Sinn Féin spokesperson on public expenditure Mairead Farrell said the increased spend on capital projects says more about the "chronic underinvestment" in years gone by than "the scale of present ambition".
"I'm struggling to see how we are going to house people, have affordable housing for people under the current model, I don't think there is the ambition to follow though," she said.