Advertised rents rose by an average of 5.7% last year, according to the latest report by property listings website Daft.ie.
The rate of increase is marginally slower than the 6.8% rise recorded in 2023.
The average rent on the open market nationally is €1,956 which is 43% higher than before the outbreak of Covid-19 in 2020.
While the availability of homes to rent had improved over the past two years, the situation deteriorated in the last few months particularly in Dublin where supply of rental properties has fallen.
The report said that on 1 February this year, there were fewer than 2,300 homes available to rent across the country, down one quarter on the same date a year previously and well below the 2015-2019 average of almost 4,400.
In Dublin rents in the final quarter of 2024 were 4% higher than a year earlier, while outside the capital they were 7% higher on average.
The figures are based on new tenancies.
Limerick saw the highest rent increase at 19% last year.
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Ronan Lyons, author of the report and associate professor in economics at Trinity College Dublin the imposition of some of the strictest rent controls in the world have not solved the underlying issues in the housing market.
He said: "an acute shortage of rental housing continues to plague the market, driving rents in the open market further up and creating a wedge between those that get the benefit from rent controls and those that do not.
"Rents for movers have increased by almost half since rent controls were tightened in 2021, while rents for 'stayers' have risen by just seven percent in the same time," he added.
Mr Lyons said the current situation regarding rent controls was "clearly unsustainable".
The Organisation for Economic Cooperation and Development has called for the current rules to be relaxed and for landlords to be able to freely reset rents at the end of a tenancy.
Mr Lyons said the Government may also wish to increase rent caps so property owners can cover maintenance costs.
Watch: Is rent too expensive in Ireland?
Call for reform
"Significant reform is needed" in the sales market, said President of the Institute of Professional Auctioneers and Valuers Lisa Kearney.
"We are in a crisis and significant reform is needed," Ms Kearney said.
"We wouldn't have these rising rents and prices in the sales market, these are a signal of a shortage of supply and a shortage of housing, that is a given," she added.
Speaking on RTÉ’s News at One, she said: "If the Government can’t wake up and see this, there’s something seriously wrong and they need to address and have that stream of new supply coming on the market immediately – not in the long-term, we need it now and we need it straight away."
Ms Kearney, who is also the Director of Rooney Auctioneers in Co Limerick, attributed the rise in rent in the county to an increase in demand.
"Limerick is a victim of its own success," she said, adding the city "has transformed in recent years".
"We're attracting major multinational companies in tech, pharmaceuticals, the financial services," she said.
"When those workers come to the area, they need housing, be that to rent or to live in and to buy, so that is where we're finding a significant increase," Ms Kearney said.
She added that simultaneously, colleges in Limerick bring around 25,000 students to the area each year, with many relying on the private sector.
"Many of these students are then forced to compete with the professionals and the families for private rentals, driving up demand further," she said.
Ms Kearney said procedures should be put in place to encourage people to take on vacant properties to bring them back into the market.
Regarding signalling from the Government that a change in policy is on the way, Ms Kearney said that "something urgent needs to be done".
