If the average wages are 25-33% higher and the cost of land is up to a factor of 20 higher in Dublin, a several percent rise in the price of materials becomes practically irrelevant. How much has materials price increases contributed to the 50% rise in Dublin property prices since 2012? -- practically nothing I would suggest.
Not only that, but the higher wages and land costs in Dublin are because of the high property prices -- it's a vicious circle. Basically people are prepared to sacrifice a dangerously high proportion of income to go where the jobs are, fuelling a bubble. In a situation of undersupply prices will rise to soak up any amount of available credit. It would be sheer insanity to loosen lending limits when prices are rising at 20 times the rate of inflation. The mind boggles as to how people (mostly vested interests) can be calling for this.
There are other structural issues that need to be addressed as a matter of urgency to fix the supply problem. Unfortunately our government's clever masterplan which is still focused on addressing the disastrous fallout of the last bubble is aimed at jacking prices up ever higher, so that the next crash is getting baked in as we speak. Except next time we'll be starting from a 100% debt to GDP ratio and with billions in arrears and bad loans from last time round. Why do keep wishing this on ourselves?