Finance Minister Paschal Donohoe has said investment funds have a role to play in the Irish housing market.
He was speaking as the Government comes under increasing pressure, to legislate to prevent such funds buying up entire housing estates.
It comes after an investment fund bought up an estate in Kildare en-masse.
Taoiseach Micheál Martin has said it is not acceptable, and work is underway within the Departments of Housing and Finance examining the issue.
In the Dáil earlier, he said: "Can I state unequivocally that the purchase by institutional investors of completed housing estates is unacceptable, and not consistent with Government policy.
"We do not want institutional investors competing with first-time buyers - our priority is first-time buyers".
Minister Donohoe told The Hard Shoulder he agrees with what the Taoiseach said.
"It's because of the aim of increasing supply that there is a role for intuitional investors overall.
"But to be very, very clear about this particular issue: I don't support, nor was it intended, that funds would be purchasing homes that are already built.
"The reason why we do support the role of intuitional investors is to help fund homes, that in the absence of these funds, would not be built.
"What we do know.... is what intuitional investors can do is they can indicate they're going to pre-purchase a share of homes - that, in turn, then gives confidence to private sector developers to go ahead and build homes in the first place.
"The reason why these funds play a role in Ireland, as they play a role in many other parts of Europe and across the world, is they give confidence that a share of homes in a development are going to be purchased.
"And because of that, then, it gives confidence for the overall project to go ahead.
"They have a role to play generally, but it's about creating new supply as opposed to competing for supply of homes that are already built".
PUP decision 'in late May'
Minister Donohoe also said a decision on the Pandemic Unemployment Payment (PUP), and it's future, will be made soon.
He said comments around the PUP and June are being made as that is when the scheme legally comes to an end.
Asked about potentially tapering down the PUP from next month, he said issue is still being reviewed.
"We have not yet made that decision - and myself and [Public Expenditure Minister] Michael McGrath are absolutely aligned in how we are working on this and the issues that we are considering.
"When we get to June, all the schemes that are in place at the moment come to a legal end at that point.
"And we'll have to consider their future beyond June.
"We're aiming to make an announcement at that towards the end of May or in very early June - so that businesses and citizens know where they stand.
"We will be looking at the design of them after that point, but we haven't decided on the design or level of them yet.
"But what I'm very much aware of is - even through the economy is re-opening, and we can see signs of people going back to work, companies getting ready to re-open - it's been an awfully hard year for so many.
"And the level of cost, and the level of difficulty, that many are facing will not be fixed by a few weeks of good trading".
'Changes at the right time'
He said the Government did not anticipate the scheme would still be in existence, in its current form, for a year.
"The reason that we've kept it at this level for so long is in recognition of the difficulties they're facing.
"And just to say, therefore, to somebody who is concerned about the future of the payment, that we will try to make the changes at the right time and in a very, very gradual way in recognition of the challenges that they face.
"But the balance that we're trying to get at the same time, in relation to all of this, is even up to the end of this year".
He added that the scheme will not end suddenly, but changes may have to be made.
"No cliff edge I think means it's not going to be turned off immediately overnight, and we're not going to do that.
"We will try to keep these schemes in place for as long as we believe they are needed.
"But we have to get the balance also right between how long we can afford to keep them in place for.
"And that's what we're looking to do at the moment, and that's why we want to make announcements as soon as we can so that everybody knows where they stand".