More evidence of the two tier housing market is contained in the latest house price barometer.

Over the three months from July to September, the index from the property website showed a rise of 0.9% in asking prices in Dublin.

Nationally, though, prices are still falling and the third quarter saw a decline of 1.4%.

Over the past 12 months asking prices are down 7.8% - the lowest annual rate of decline in six years. said the mix adjusted average asking price in Dublin stands at €240,000 in the third quarter, while the asking price nationally stood at €190,000.

Caroline Kelleher of DKM consultants, which prepared the report, said the figures show the two tier market which exists between Dublin and the rest of the country is continuing to gather momentum.

Mr Kelleher said the lack of supply in the Dublin market is one reason for the rise in prices there. She pointed to the constraints on people who are in negative equity and are either unwilling or unable to sell and trade up as one of the reasons. Another factor was the delay by the banks in dealing with mortgage arrears and repossessions.

"With increasing pressure being put on banks it is likely more activity will be seen in this area and should some of these properties enter the market, it could exert significant downward pressure on prices given the low stock levels," Ms Kelleher said.