There was a 32 per cent fall in the number of new mortgages issued by banks in the three months to the end of September compared with the same period last year.
Data from the Irish Banking Federation (IBF) shows 27,937 new mortgages to the value of some €5.6 billion were issued over the period, 20.5 per cent below the total for the second quarter 2008.
In value terms the loans advance during the period were 36.8 per cent lower than the €8.98 billion in loans issued during the third quarter in 2007.
At the end of the third-quarter the overall national mortgage book stood at €147.5 billion.
The IBF/PwC Mortgage Market Profile found average loan sizes have fallen across all market segments.
Commenting on the findings, IBF chief executive Pat Farrell said: "The continued slowdown in mortgage market activity overall is hardly surprising given the very challenging economic environment that prevails.
"Notwithstanding this, the first-time buyer share of the overall market continues to grow and this is to be welcomed; as is evidence of improving affordability as house prices continue to decline."
The research found the share of the market held by first-time buyers had increased to a high of 19.9 per cent by volume and of 23.3 per cent by value in the third quarter.
The "mover-switching" segment is now the largest part of the market, accounting for 25.8 per cent by value, while residential investment letting continues to fall, dropping to 11.4 per cent.
The report said over 90,000 mortgages have been drawn down this year to date. The IBF is the representative body for the banking and financial services sector in Ireland.
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