The Central Bank will offer some relief for first-time buyers under revised rules on mortgage lending.
Prospective home-buyers will have to save bigger deposits under the regulations.
Banks will only be able to lend up to a maximum of 80% of a property’s value for most owner-occupiers.
However, they will be able to lend up to 90% of the value of the home to first-time buyers up to a limit of €220,000.
This means that first-time buyers will need a 10% deposit for the first €220,000 of their property’s cost and 20% of whatever is above this limit.
For buy-to-let mortgages, the figure is 70%, meaning a 30% deposit is required to secure a loan.
The new rules will take effect once they have been laid before the Oireachtas.
Central Bank Governor Patrick Honohan expects that to happen in a matter of days.
He also said that about half of the houses being bought by first-time buyers in Dublin are below the figure of €220,000.
He said: “These measures will reduce potential financial vulnerabilities for both borrowers and the wider economy and will help ensure a stable and well-functioning mortgage lending market.
“We have carefully considered all feedback received through the consultation process.
“As far as the LTV limits are concerned, we are retaining the basic 80% limit for owner-occupier loans and 70% for buy-to-lets.
“At the cost of some additional complexity, but without compromising the overall effectiveness of the measures, we are increasing the limit for first-time buyers of lower-cost houses.
“The requirements are flexible enough to be adjusted in the future should the need arise without the need for a long period of consultation,” he added.
Minister for Finance Michael Noonan said: “The announcement of these revised proposals will provide certainty to borrowers and ensure that banks continue to engage in prudent lending practices.”
Deputy Governor Stefan Gerlach said: “In Ireland we are still experiencing the destabilising effects of a property bubble.
“We have based these regulations on in-depth economic analysis and empirical evidence. Measures such as these should be a standard part of a well regulated financial system.”