The cost of average private rents jumped 84% in the nine years to last year, new research from the Economic and Social Research Institute has found.
The study found from 2012 to 2021, average rent rose from €589 to €1,084 per month.
The analysis concluded that this has led to a substantial decrease in housing affordability for low-income people dependent on the private rented sector.
Young people have also been disadvantaged by the development.
The erosion of affordability came despite a broad growth in income over the period, including during the pandemic, the paper found.
The situation has left levels of income inequality at a new record low, one fifth below its historic high in 1987, the research by Barra Roantree, Michelle Barrett and Paul Redmond concluded.
“Addressing the challenges of housing affordability highlighted in our report will require a sustained increase in supply, particularly of social and cost rental housing,” Dr Roantree said.
“Until that is achieved, and despite the large costs involved, supports like HAP will continue to play a key role.
“Given this, more regular review of the income and rent limits governing the scheme will be needed if the exposure of more households to unaffordable housing costs is to be avoided.”
The paper estimates that as many as 785,000 people were at risk of poverty last year after the cost of housing is included.
This compares to 625,000 when the cost of housing is not taken into account.
But surprisingly, it also found that the measures of income poverty and inequality have seen sustained declines in recent years, reversing the rise experienced in the years following the financial crisis.
These reductions are largely driven by patterns of housing tenure, with most of the population now living in owner-occupied accommodation, as well as historically low mortgage interest rates and the expansion of the supported rental sector.
But the study also found that there is a large group of individuals who are materially deprived but not classified as being at risk of poverty.
The research was funded by the Community Foundation Ireland.
“Despite the progress in reducing income inequality, this report highlights significant challenges in relation to poverty, something the 5,000 voluntary, community and charitable partners of The Community Foundation for Ireland respond to each day,” its chief executive, Denise Charlton said.
“The identification of key at risk groups like renters, people with disabilities, lone parents as well as the ‘working poor’ will help inform that work.”