The new Government scheme aimed at helping first time buyers is likely to drive up house prices, the ESRI has warned.
The shared equity scheme is part of the new Affordable Housing scheme, which was published by the Housing Minister last month.
It would see the State take a 30 per cent stake in the homes of first time buyers, who will take out a mortgage for the remainder of the cost.
Dr Conor O'Toole from the ESRI says a considerable number of households will not be able to become homeowners.
"This static approach does not take into consideration that housing supply is so constrained in Ireland, and increasing purchasing power for households through a loosening of credit constraints will likely lead to higher house prices.
"Such rises in house prices are likely to exacerbate affordability problems down the line."
