Housing charity Threshold has called for a register to be progressed for short-term lets ahead of the 2024 tourist season.
The group claims a significant volume of houses which could be long-term homes are instead being let to tourists.
The European Parliament has now adopted a regulation which aims to streamline data collection and sharing obligations for online rental platforms.
The proposed legislation aims to introduce registration requirements for property owners of short-term lets, ensuring compliance through fines of up to €5,000 for non-registration and penalties for online platforms advertising unregistered properties.
Fáilte Ireland estimates up to 12,000 properties could be reintroduced to the long-term rental market on enactment of these regulations.
Threshold chief executive John-Mark McCafferty said recent developments in the European Parliament around the acceptance of EU regulations for short-term lets means Ireland should now take the necessary action to pass legislation.
"The number of short-term lets currently operating in Ireland is causing disruption to the long-term private rental market. The narrative of some companies that promote short-term letting is that hosts are 'renting a room in their primary home', but this is not always the case," Mr McCafferty said.
"Studies have suggested that increasing touristification and gentrification have created a whole new class of homebuyer - the short-term rental speculator.
"A high proliferation of short-term letting platforms can reduce affordable housing options, higher average asking rents, and erosion of neighbourhood social capital. This is impacting the viability of cities and towns.
"One tangible example that many people may be able to relate to, is that of people who work in the tourist sector being unable to secure homes in or around where they are working. This simply has to change," he added.
