Rents increased by 1.6%, year-on-year, last month, while mortgage interest rates jumped nearly 2%, according to CSO figures, which showed an overall return to inflation.
April saw the first rise in annual monthly consumer prices since before the Covid crisis hit.
The CSO said overall consumer prices rose by 1.1%, year-on-year, in April, driven by a spike in utility and fuel costs.
Prices rise by 1.1% in the year to April 2021https://t.co/MV02ViIA1T #CSOIreland #Ireland #CPI #ConsumerPrices #Inflation #Deflation #Prices #BusinessStatistics #Business #BusinessNews #IrishBusiness pic.twitter.com/GN8STHITkr— Central Statistics Office Ireland (@CSOIreland) May 13, 2021
It was the first time prices showed an annual increase since a minor rise in March of last year, just as the pandemic was beginning to bite.
Annualised consumer prices have shown a consistent overall decline throughout the Covid crisis.
Average countrywide residential rents rose by 2.7% year-on-year in the final three months of 2020 and were up 2.1% in the first quarter of this year.
Industry group the Institute of Professional Auctioneers and Valuers recently said the Government needs to overhaul rental legislation and speed up the supply of new houses to alleviate the rent crisis.
A Daft.ie report this week claimed the shortage of properties is resulting in tenants paying an extra €900 in rent per year, as demand continues to far outweigh supply.
Meanwhile, figures from the Central Bank this week show the average mortgage borrowing rate in Ireland currently stands at just below 2.8% – more than double the eurozone average of 1.26%.
Austin Hughes, chief economist at KBC Bank Ireland, said overall consumer prices are likely to remain permanently higher than they have been for some time, but runaway inflation is unlikely.
Short-term impacts of things like a turnaround in commodity prices, the reopening of the economy and a stronger sterling will influence upward inflation for the rest of the year, he said.
Mr Hughes said prices need to rise a little more in order to oil the economy as it emerges from the pandemic shock, but with unemployment levels likely to remain elevated for the next couple of years, soaring out-of-control inflation is not to be expected.
The CSO said energy and fuel costs rose by 3.6%, on a yearly basis, in April. Also driving the overall rise was a 3% jump in health costs and a 2.2% rise in the price of tobacco and alcohol products.
On a monthly basis, consumer prices in April rose by 0.7%.