Residential rents rose 11.7% year-on-year in the third quarter, according to new figures from property website Daft.ie.

This marked the fastest rate of annual inflation since the series began in 2002 amid a chronic shortage of housing throughout the country.

Daft, which advertises nine out of every 10 properties for sale in Ireland, said the figures also marked the joint highest quarterly increase in rents and a new all-time high for the average monthly rent nationwide of €1,077.

"These figures are worrying. They make grim reading for most, including those renting and those in charge of Ireland's housing system," said Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie report.

"This is having a disastrous effect on social cohesion as well as on Irish competitiveness," the economist added. 

Today's figures also reveal that there were just over 3,600 properties available to rent nationwide on October 1, the lowest figure for October since the start of the series in 2006. 

This compares to October 2014 when there were almost 6,000 properties listed nationwide.

The annual rate of inflation in rents in Dublin in the year to September was 12.1%, its highest late since late 2014. 

In Cork, rents rose by 14.4% in the year to September, a slight easing of inflation compared to earlier in the year. 

Rents in Galway are 10.9% higher than a year previously, while rents in Limerick have risen 13.2% in the last year. 

In Waterford city, rents have risen by 11.2% in the past twelve months, while outside the major cities, the increase has been 10.9%.

Mr Lyons said that the latest increases stem from strong demand and very weak supply. 

"In order to bring about more rental supply, policymakers urgently need to audit the cost of building homes in Ireland compared to other high-income countries," he added.

The economist said that it is 40-45% more expensive to build housing in Ireland when compared to other countries with high incomes. 

He said that unless construction costs are tackled, problems of housing supply and rising rents are going to continue to persist. The Government needs to find out why the cost of building is as insufficient in Ireland as it seems to be, he added.

He suggested that construction costs need to be audited, adding the cost of building a square meter "is so out of line with other countries."