Both chambers of the Irish parliament have passed the controversial law that guarantees all bank deposits but this is expected to give only short term respite from the downward spiral.
CB Richard Ellis analysts said that the lack of bank funding was significantly impacting activity in the development and investment property sectors with only £370 million of deals taking place in the first nine months of the year compared to £1.2 billion in the same period last year.
A market update report said many commercial occupiers are postponing expansion plans or relocation decisions because of the weaker economy but some deals were still happening.
'Conditions in the Irish commercial property market remain very challenging. The ongoing financial market crisis and lack of liquidity in the banking system has essentially made many sectors of the property market illiquid and this makes the accurate assessment of property values very difficult,' said Guy Hollis, managing director at CBRE in Ireland.
The 'exorbitant' 9% rate of stamp duty ought to be reduced to encourage non-domestic buyers, analysts said. Experts are also encouraging the Irish government to address the problems of the residential market in the county's forthcoming budget.
Lack of mortgage finance is severely impacting on property with the upper end of the property market suffering the most. 'There is activity in the property market, but it's at the lower end. As you move up the price scale, things get much quieter,' said John O'Sullivan of Lisney.
'Back in 2005 and 2006, the people who were paying big prices for trophy homes were the ones who were doing extremely well in areas like property and construction, as well as business people who were earning big bonuses. But that is a tranche of buyers that simply does not exist anymore,' he added.
'We probably have more people on our books now who actually want to buy a house than we had this time last year, but there are less of them with the ability to do so. If this issue isn't sorted out, then everything else will grind to a halt.'