Taoiseach Enda Kenny has expressed confidence the Irish construction sector will soon get back to building 20,000-plus housing units per annum.

However, he warned the Government will not tolerate any return to substandard housing or poor building practices.

"We have a bottleneck in the housing system. You have a requirement to deal with a number of homeless people, you have a requirement to deal with a demand for social housing and a serious demand for three- and four-bedroom houses for couples whose families require them," Mr Kenny said in Cork today.

“We cannot deal with any of those unless we have greater flexibility in our planning, a process by which credit is available to contractors to build and credit is available to people who require mortgages to purchase these places,” he said.

Asked about proposals by Dublin City Council to use prefabs to deal with the growing housing shortage in the capital, Mr Kenny said the Government has provided funding for the reconstruction of 1,800 units in Dublin.

“I expect to have a report on that at the next Cabinet sub-committee meeting. This will relieve in some small way the problem that is here. You cannot deal with it unless you have blocks and concrete and houses being built.”

The Taoiseach said tackling homelessness was a priority for Minister for the Environment Alan Kelly.

“We would like to think we can get back to a time when we are building 20,000 to 30,000 houses per year to meet the demand that is there and the demand that is going to grow,” he added.

“Every time a foreign direct investment comes into the country, that is a further demand for apartments, for houses, for facilities and for infrastructure and the construction sector has got to come back to where it can meet the sustainable needs of a modern, thriving country.

“Everybody understands that confidence is rising, but we have got a real challenge in the construction sector – we don’t want any more Priory Halls, we don’t want any more cowboys. We want a construction sector that can match up to the demands of a modern country.”