The amount of mortgage money drawn down will drop by almost a third in the last three months of the year, compared with the same period in 2014, according to the Association of Expert Mortgage Advisors.
The group wants the Government to put together a "dedicated taskforce" to "look at all the issues combined in order to come up with a comprehensive, well thought-out, workable solution to the current housing crisis".
It thinks mortgage volumes could fall in 2016 because of cash-rich buyers drying up.
"The mortgage market should be 'normalising', which means volumes should increase by up to 50pc next year, but in reality, due to lack of supply and a tightening on lending rules, they are more likely to fall.
"To put this in context, mortgage volumes were €40bn in 2006 and €4bn in 2014. The general consensus is that €10bn would be appropriate for a mature, normal market of Ireland's size," said Ken Murray, a director at the Association.
"Some commentators say we need more lenders in the market to combat our high SVR rate problem - we would agree, but struggle to see the interest for foreign lenders to sell here with (a) the size of the market being so small and (b) the Central Bank restrictions being so punitive.
"We were recently in the UK visiting a broker whose company processed £10bn sterling in mortgages last year. Ireland only did €4bn in total."
The group argued that the Central Bank rules are contributing to the spike in rents, as the rules make it more difficult for people to buy houses as a result of the large deposits that are required.
It said the more favourable treatment of first-time buyers should be extended to those who are trading up and not carrying any equity from their previous house.
"The harsh reality of this is that the volume of mortgages drawn in the latter part of the year will fall off dramatically due to a culmination of the facts that would-be homeowners are simply unable to save the massive deposits and the fact that the banks have run out of exceptions," Murray said.
"This will then be followed by a three-month spike in mortgage drawdowns in January-March next year, as people grapple for the new 2016 lending exceptions, which will then be followed by a repeat of this year's contraction in lending as the exemptions run out."
The Association says over half of Irish mortgage business done through brokers is conducted by its members.