The State's advisory body on housing is in favour of keeping the help-to-buy scheme.
There are fears the €20,000 grant for first-time buyers of new-builds could be driving up property prices.
The Government's housing advisor also wants developers who build 'low density' homes to be penalised.
The Housing Agency says there should be a levy on sites where 'high density' building would have been possible.
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"In the major urban areas of the cities we do need housing," said CEO John O'Connor.
"Our population has changed, household size has changed, and we need a lot more houses.
"What we're suggesting is that higher density housing should be encouraged."
