The Minister for the Environment said the Government planned to "dampen down house price increases and ensure continued access to home ownership for a very large proportion of our population."
Mr Dempsey said there was no single measure or "magic bullet" to counter the fundamental factors which had caused the massive rise in demand and prices. But instead there had to be "a well-targeted combination of measures."
At the launch of the Bacon Report and the Government Action Plan on House Prices, Mr Dempsey said the escalation in property prices during the past few years had been "remarkable, not only for its scale, but also its longevity."
This had posed difficulties for house buyers, particularly first-time buyers, and it was the Government's overriding concern to improve home ownership for this group.
Several measures were being introduced to increase the potential housing supply.
This involved expanding the area of available serviced land by removing infrastructural constraints, promoting high densities at appropriate sites, encouraging the faster release of land for residential development, and achieving market access to the existing housing stock, said Mr Dempsey.
There was also a need to address factors causing overheating or distortion in the market. A key issue was the need to "dampen excessive investment down and thereby help restore better balance between supply and demand."
Also, measures had been introduced to improve the position of prospective first-time buyers, he said.
An additional £15 million would be provided by the Government to fund extra servicing of land under the Serviced Land Initiative. This would provide for 45,000 housing units.
The Bacon Report had also identified scope to boost the housing supply through higher densities, said Mr Dempsey.
The Minister of State for Housing and Urban Renewal, Mr Bobby Molloy, said it was vital for the property market in the long term that it was not "jeopardised by excessive overheating or distortions in the market."
Investor demand was a source of overheating in the market.