The supply of rental properties across the country increased by 50 per cent in the past three months of 2007, according to a report from property website Daft.ie.
The increase in supply led to a levelling off in rents, with the average rent nationwide remaining unchanged at €1,388.
The report said the increase in supply was more than likely a consequence of investors who had put up their properties for sale in 2007 - or who had left their properties vacant up to now - releasing more properties onto the rental market.
These properties have pushed up the overall level of supply and contributed to the slowdown in rents, particularly in non-city areas, it said.
The report indicates average monthly rent in Dublin is now €1,467, up 8.7 per cent on last year. Average rent in Cork is €1,160, up 7.7 per cent, in Galway it is €1,008, up 6.6 per cent, while in Limerick it is €914, up 11.2 per cent.
Economist Dan O'Brien said: "The most likely explanation for the increase in the supply of properties to rent is that those who invested in property but had not sought a rental income are now doing so."
"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," said Ronan Lyons, economist with Daft.ie.
"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 weaknesses while immigration remains at current levels," he said.