Dublin house hunters are looking for good value in "unfashionable areas" and the capital runs the risk of becoming a haven for the rich, a leading expert has said.
New data from daft.ie has shown that prices in traditionally sought-after postcodes such as Dublin 6 and south county Dublin are falling. Meanwhile other areas such as Ballyfermot, Tallaght and Dublin 8 - which have not been as popular in the past - are showing a jump in house prices of up to 4.3pc.
In Dublin 10, for example, a two-bed terraced house will cost about €140,000, which is a jump of 3.3pc compared to 2015.
This can also be seen in the Dublin 24 area, where a two-bed house has jumped in price by about 4.3pc to €156,000.
Overall, inflation in the housing market has slowed in Dublin to about 1pc, compared to 6.3pc nationally. The average cost of a house in Dublin is €314,311 - far more than other areas of the country - signalling that it is still tougher for young Dubliners to get a foot on the property ladder.
Economist Ronan Lyons, who compiled the figures for April-June, has linked the increase in previously less-sought-after areas with the controversial Central Bank mortgage rules introduced last year.
"Priorities are perhaps being reshuffled," he said, "and this may lead to even less affordability for low-income families in Dublin.
"The link between incomes and house prices has forced people to reconsider some of their implicit assumptions about where to look when buying a home - leading to what might be termed 'accidental gentrification'," Mr Lyons said.
"This will undoubtedly have some positive effects, not least if affluent Dubliners become more familiar with the city they live in and some of their purchasing power refreshes some Dublin suburbs.
"But there are clear risks also. Primary among them is that lower-income households become priced out of the entire city within the M50.
"When it comes to housing, the Central Bank's only real responsibility is the financial stability of the system as a whole. It has no remit to increase supply," he added.
Government policy must be put in place to protect home seekers in the capital and around the country, Mr Lyons said.
"Without the rest of the policy system responding - through, for example, relaxing land use restrictions and lowering construction costs - the Central Bank rules could combine with prohibitive site and construction costs to make Dublin into an enclave for the rich."
However, there are some key elements in the latest data that could point towards a recovering property market, Mr Lyons said.
Among these is that supply increased slightly in the second quarter, with more houses available for sale when compared with the first three months of the year.
This increase was also seen at the same time last year.
However, it remains unclear if it is a sign that supply is beginning to meet demand.
The gap between the asking price and the final sale-agreed cost of homes is also narrowing, which is considered as another indicator that things may be improving for the property market.
Outside of Dublin, house prices are rising at a faster rate.
The commuter counties are seeing rises of between 4.1pc (Wicklow) and 5.3pc (Meath). In Kildare, the average house price is €226,254, an increase of 10pc on last year's prices.
However, the problem of supply remains a pressing issue for home buyers. A separate report from myhome.ie found that property supply is down more than 6pc when compared to last year, and is again nearing historical lows.
Conall MacCoille, chief economist with Davy, warned that despite ambitious plans from the Government there is no short-term solution.