Irish property prices are recovering after being cut in half by the bursting of a bubble in 2008.

But while the boom left a glut of unwanted housing in many parts of Ireland, the central bank has been warning that a protracted delay in addressing shortages, particularly in Dublin, has the potential to put prices back on an unsustainable path.

Honohan said new mortgage lending restrictions introduced on Tuesday would contain the problem but that action was needed from others, implying that local authorities and building companies should address the problem. Data showed prices in Dublin were rising at an annual rate of 22 percent at the end of last year.

"There is a problem for people in Dublin," Honohan told a news conference. "Some of these challenges are difficult challenges; certainly the return of supply is slower that I would have expected.

"I am told that in some cases regulations brought in towards the end of the boom maybe go beyond what is desirable in the current context, when we're looking to increase the number of houses to an adequate standard, not the nonsense of the past."

House completions throughout Ireland hit a record low of 8,300 in 2013, down from an unsustainable 93,000 seven years earlier before the property bubble burst and wreaked havoc on banks and the economy.

The number of new houses built last year rose to just over 11,000 -- less than a third of them in the county of Dublin -- and that was still the fourth lowest since records began in the 1970s, when 23,000 homes were built on average a year.

In research examining the impact of the new lending rules on the property market, the central bank said there were policy options available to the government to tackle the dearth of supply but costs would have to be weighed up when the scope for additional spending may be limited.

Citing feedback received during two months of consultation, it said measures include carrying out a cost-benefit analysis of building regulations, supporting the provision of new types of finance for construction and possibly further utilizing NAMA, the state's "bad bank", in developing projects.

(Editing by Jeremy Gaunt/Ruth Pitchford)

By Padraic Halpin