Average house price values in Dublin have tumbled by €5,000 on average since June.
At the same time, prices in Cork and Galway have flat-lined as aspiring buyers in the main cities now find themselves caught in a 'Catch 22' caused by new borrowing requirements and fast-rising rents.
The unexpected slide in prices in the capital and the stasis in the other cities is being blamed on the higher deposits and loan-to-value ratios which have been required since the start of the year for borrowers.
Experiencing a double blow, buyers who have been forced to remain in rental accommodation by the new rules are now contending with soaring rents which have climbed more than 15pc in the year. In turn, the higher rents are preventing them from saving the larger deposits now required.
Philip Farrell, chief executive of estate agents group Real Estate Alliance (REA), said: "Our agents on the ground in Dublin are reporting a growing withdrawal of couples aged between 25-40 from the market due to the new mortgage deposit regulations."
Another effect of this is that cash buyers - who were falling as a percentage of purchasers overall - are now increasing their share of sales once again in city areas.
This is evidenced by REA data which shows an increase of 5pc in the number of cash buyers (up to 34pc) in the Dublin city market, reversing an 18-month trend that had seen mortgage buyers steadily increase their percentage share of purchases.
Elsewhere, cash buyers are largely shrinking as a percentage of deals overall, from 56pc to 46pc over the last four quarters, but still high by international standards.
Prices in the rest of the country grew by 2.7pc in the third quarter of 2015, to an average €120,786.
The biggest upward movement in prices over the past three months have come in Roscommon (up 8.3pc to €65,000), Cavan (up 7.7pc to €70,000) and Monaghan (up 6.3pc to €117,000). These counties are operating off a low base and had not previously felt the benefit of the property uplift which took hold in 2014.
A shortage of supply of suitable three-bed semis has caused an increase in prices in urban areas of Donegal, with prices rising by 4.6pc to €82,500.
While the average house price in Dublin city and county has fallen by over €5,000 in the past three months, south Co Dublin has been the hardest hit in the country, with prices falling by 4.1pc since the end of June.
The average semi-detached house nationally now costs €188,102, the Quarter 3 REA Average House Price Survey has found - a slight rise on the previous quarter figure of €186,968.
"Just as many couples cannot afford to get on the housing ladder, second-time buyers cannot move and free up cheaper properties for new entrants and this is causing a logjam in the capital," said Mr Farrell.
The REA survey concentrates on the sale price of Ireland's typical stock home, the three-bed semi, giving an up-to-date picture of the property market in towns and cities countrywide to the end of September.
Unlike surveys based on asking prices, statistics are based on prices achieved rather than sought. And, unlike the CSO data which has a time lapse of some months attached, the REA survey also takes cash purchases into account.
The price of an average three-bed semi in Dublin city and county has fallen by 1.47pc from €339,500 to €334,500 since the end of June.
"When the Central Bank introduced the new rules, they stated that they could revisit them, and we believe that they need to do so as a matter of urgency," said Mr Farrell.
"We believe that the new borrowing requirements are exceeding their desired effect and are now starting to prevent the market from functioning in a cohesive manner.
"We propose that the price ceiling for first-time buyers should be extended to €330,000 - in line with the average values in Dublin - and secondly, second-time buyers should be assisted by allowing them to borrow 90pc up to €220,000, as the current requirements are too prohibitive.
"Falling house prices are not a sign of success or affordability, they are falling because young people cannot afford to qualify for a mortgage, and second-time buyers cannot afford to move out of houses in the €220,000 band," he added.
Prices in north County Dublin have decreased by 1pc to €247,500, and Dublin city by 0.83pc. The average three-bed semi price rose by 0.71pc to €206,676 in the commuter counties and the larger cities over the three-month period.
"Average properties in the extremes of the outer commuter belt also felt an increase in Q3, with Kilkenny rising by 5.45pc to €145,000 and Westmeath growing by 4pc to €130,000 - both figures well inside the first-time buyers' threshold," said Mr Farrell.
"However, in previously growing areas such as Cork and Galway cities, the market is flat due to prices being over the first-time buyer threshold.
"The time taken to sell in this band has also increased from five to eight weeks in the last three months, and we are hearing from our agents that they may have more people bidding, but it is a slower process," he added.
Meanwhile, estate agents around the country are experiencing a lack of supply.
Estate agent Barry McDonald in Lucan, Dublin, said he was seeing "reasonable activity" at lower levels but added there was a lack of suitable properties on the market as a whole.
"The new lending rules are having a real effect on what people can borrow and mean that mortgages are now out of some people's reach," said Mr McDonald. "There is reasonable activity at lower levels, but the problem is that there is little stock available at those levels.
"Buyers are more discerning and are looking at more houses before they are making offers. For example, one three-bed with a guide of €280,000 attracted over 20 viewers in the first 10 days. We received one bid. A year ago, we would have received many more offers," he added.
A spokesperson for McElhinney in Milford, Co Donegal, said: "There are still houses coming to market but demand is taking them out fairly quickly. Prices have a ceiling and, while mortgage buyers are pushing the prices up slightly, overall, buyers are stilling trying to stay within their means."