Rents have begun to increase for the first time in two years.
In a review of the Irish property market, Bank of Ireland has said a surge in employment has resulted in increased demand for accommodation.
This year looks set to have the highest rate of growth in employment for the past five years
In the 12-month period until June, 93,000 jobs were created in Ireland.
The surge in employment and the growth in the number of people coming to work in the country is driving up the cost of rental accommodation.
Rents have risen by 2% this year. That reverses a decline of the past two years, according to Bank of Ireland.
Its economist Dan McLoughlin also says property prices will rise by 10% this year. That forecast is higher than most commentators predicted until now.
He believes mortgage debt will reach €94 billion, up 26% on last year.
Bank of Ireland says interest rates could rise by 1% over the next year. That may dampen demand for home loans but will not lead to a drop in house prices.
