Rents in Dublin have risen 7.5% over the past year, after registering their fourth consecutive quarter of growth.

The news comes as daft.ie releases its latest report on the Irish property market.

It marks the fastest rate of rent inflation since mid-2007.

As might be expected, the property market in the capital is experiencing very different conditions to the rest of the country. While prices in Dublin are rising, they are falling elsewhere, according to Daft.

Rents outside Dublin are now stable, having risen 0.9% (or €6 on average) in the year to mid-2013. Over the last year, roughly 3,700 units have been rented out in Dublin each month.

However, there are now fewer than 2,400 available to rent in the capital.

"Elsewhere in the country, the 8,600 units available to rent look sufficient to meet demand that measures typically 6,400 units each month," said Ronan Lyons, Daft's in-house economist.

"This is relevant for Ireland's third-level students, many of whom will be looking for a new place to live over the coming weeks. Whereas a group of friends renting a four-bedroom house in Dublin may have to fork out between 10% and 15% more than last year, their counterparts attending ITs around the country will probably have their rent unchanged."

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The Daft report points out the contrast between Dublin and Waterfront rents.

While it appears rent inflation is accelerating in Dublin, in Waterford the fall in rents may have stabilised at about 3% a year, but are still falling.

"This must reflect conditions in the local labour market, which was hit hard, not only with the loss of construction jobs, but also developments such as the closure of Talk Talk," said Mr Lyons.

"Unlike Cork, with its pharmaceuticals hub, and Galway, with its medical devices sector, Waterford lacks an IDA hub around which the local economy can build," he continued.

"Often the public sector can act as a hub but the parlous state of public finances in this country means that Waterford cannot rely on this any time soon. Much the same is true for Limerick and it is worth contrasting Cork and Galway, where rents are rising gently (about 2-3% a year) with Limerick and Waterford, where rents continue to fall."

But Mr Lyons said it wasn't all bad news.

"The good news is that the problem is also the solution," he explained.

"Cities like Waterford and Limerick compete with others, both in Ireland and abroad, on costs as well as productivity. Low costs of accommodating workers is good news from a competitiveness point of view and as the cost of housing and office space in Dublin rises, cities like Limerick and Waterford will become more competitive, particularly for projects that don't require a central location, such as corporate services or back office functions.

"So hopefully, as this year's crop of students go from house-hunting to graduating over the next few years, the economic fortunes of Ireland's regional cities will have improved."

(IT/JP)