AIB has announced a fund worth €350 million for the building of new homes in Dublin, Cork and Galway. It is being targetted at developers with experience in the residential market, and is available from today.

The bank says the fund is expected to significantly boost job creation in the construction area.

In a statement, management say they are making mortgage funding available to match demand in the market .

The bank is asking new and existing customers to apply for new funding.

Head of Business Banking at AIB, Ken Burke said "AIB recognises the acute shortage of available housing in key locations around the country and this...fund will support experienced operators in constructing quality housing units to help meet demand".

Property Industry Ireland (PII), which represents businesses in the Irish property and construction sectors, has welcomed the move

PII Director Dr. Peter Stafford commented "The lack of new housing has been the main contributing factor to the rapid increase in house-prices and rents in some parts of Ireland".

"The most important issues in the property sector in 2014 will be how to maintain affordability of houses through increasing the supply of new property to meet the demand, and encouraging the availability of funding to build them" he added.