New figures today show that the supply of properties available to rent across the country increased by almost 50% in the last three months of 2007.
Daft.ie's latest rental report says that this dramatic increase in supply has led to a levelling off in rents, with the average rent countrywide unchanged on the previous three months at €1,388.
Daft says the increase in supply is probably due to investors releasing more properties onto the rental market, thus pushing up the overall level of supply.
It says that rental growth slowed to 4.3% year on year, the slowest pace since November 2005.
'Rents have now stopped increasing for the first time since they started to rise in mid-2004, when Ireland opened its labour markets to the new EU members,' commented Daft's economist Ronan Lyons.
He says the fact that rents have risen steadily since then shows the strong connection between the rental market and immigration.
'Overall demand still remains strong, particularly in urban areas, and we do not foresee any major weakness while immigration remains at current levels,' he adds.
The survey also shows that the stock of properties for rent on Daft.ie increased by 90% between January 2007 and January 2008, with half of this increase occurring in the final three months of 2007.
It also reveals that the average yield nationwide for rental property is 3.2%, still below the cost of borrowing.
