The insatiable demand for labour in Ireland's booming economy is a regular refrain. But getting the bodies is only one of the problems . . . finding somewhere for them to stay is another and it too is becoming an intractable one.

Although house prices are still escalating it is the rental market that affects many of those who come to Ireland to work in technology and banking. This is the busiest time of year for letting, says Mr Patrick Casey, of Casey Properties in Dublin, with families looking to move in time for children to start new school terms, and students returning to college. "The pressure has been getting worse every year as supply shrinks and demand grows and is particularly severe this year."

The combined effects of the reduction of tax incentives and their replacement with new property taxes for investors, together with a falling rate of return and planning log-jams, has curbed the supply of property available in the rented sector. A further impediment has been the return of single and multi-unit rented property to the owner-occupier market as the State's recent affluence has allowed people to set their sights higher in the property market. "Supply is very tight," says Ms Lorraine Cahill, of Home Locators in Dublin. "People are not moving on at the end of their leases because they know that, if they do, they will have huge difficulty in getting another property."

Ms Carina Warner, of Hooke & McDonald, agrees: "There is just not enough [supply] out there for people coming into the market. For example, last year, we had a one-bedroom apartment in Ballsbridge which was a little out of the ordinary. It took three weeks to let. This year, when it again became available, we had 25 people looking on Day 1 and most of them wanted it."

Mr Alan Cooke, chief executive of the Irish Auctioneers and Valuers' Institute (IAVI), puts it succinctly: "Investment money is mobile. Property investors have had a lot of stick and vilification, including from ministers. No-one wants to rent when they are being called speculators."

He said the current return on investment residential property is about 4 per cent. At that rate, it would take a property owner 25 years to recoup the cost of the property. Not long ago the return was 12.5 per cent.

"It is only the capital growth - the current rapid rise in the value of the properties they own - that makes the low return acceptable," says Mr Cooke. "Inevitably, as house prices slow, the capital growth will slow and rents are going to have to rise dramatically to compensate."

All this means a tough slog for people seeking to rent, be they professionals or students. The hardest sectors in which to rent right now appear to be the one/two-bedroom apartments aimed at single professional people and professional couples and also the student market, where bedsit units are disappearing as multi-unit property is being reabsorbed into the owner-occupier stock.

"The situation is that there are thousands of students returning to college and we are also having to accommodate around 15,000 refugees, 17,000 EU nationals and new immigration of around 15,000 per year," says Mr Fintan McNamara, spokesman for the Irish Property Owners Association. "There simply is not enough supply out there, especially in cities, and the Bacon reports have choked off investment."

Pressure on family homes - three and four-bedroomed houses in the suburbs - is not quite as severe and, as always, the demand is least for homes at the very top end of the market, simply because very few people are in a position to pay the rent such properties would bring with them.

So what should aspiring tenants do and what should they expect? The good news is that standards have risen throughout the market. People are looking for fresh, clean and modern accommodation furnished in good taste.

"There is no way tenants will accept a jumble of stuff no longer deemed suitable for the main family home," says Ms Cahill. "In general, there is a very high spec compared to, say, six years ago."

While students are unlikely to expect or get the same standard of finish in rented property, Ms Warner says they should certainly demand clean, bright and safe accommodation in good condition with no damp and with basic facilities - such as cooker, washer-dryer, plumbing and heating - in good order.

On the cost side, students can expect to pay between £300 (€381) and £500 for a bedsit in, say, Rathmines, with prices for a two-bedroom apartment rising to about £750. The big thing issue is the one-year lease, still standard in the industry but not suited to students who are essentially looking for accommodation for nine months. There is no easy answer. With demand out there, the owners can pick and choose. They do not want to be left with property on their hands going into summer when demand is poorest.

Many students break their leases to get around this problem, but remember today's solution could be tomorrow's problem. When you return in September/October, any new landlord will want references and doing a runner will not facilitate that. For similar reasons, landlords prefer older students who have got their first year away from home out of their system. First, they have a track record, which can be checked; second, they know the ropes on caring for the property, paying on time and keeping disturbance to a minimum.

Some parents find the easiest way around reluctant landlords is to lease the property in their own name for their student children, but they need to be aware of the responsibilities this places upon them for anything that might happen during the lease.

All prospective tenants should be prepared to move quickly and bring references with them when looking at property, as demand is such that, quite often, it comes down to first come, first served. They should expect to sign a proper lease and to pay the rent by standing order. Lessors should also ensure they have contact names and numbers for the owner, or their agent, if anything goes wrong.

The Irish Property Owners Association says rents tend to work out at about £250 per head, although that largely depends on where you are renting. Ms Warner, of Hooke & McDonald, said family properties in Dublin, say a three-bedroom semi, would in general cost not less than £1,000 in the city centre, £1,500 in some of the classier suburbs and around £800 in suburbs ringing the M50. For apartment living, a one-bedroom place in the city centre will run up to £500, rising to as high as £1,100 in areas like Ballsbridge - and that's without parking, which is expensive in itself. Rents at the moment are rising by between 10 and 12 per cent a year.

But what can the owner expect from the market. The first thing they need to forget is the idea of making a quick profit. Indeed, for the first few years, there is likely to be no profit at all.

"By the time you look at the cost of fitting out and furnishing the property, you cannot expect to make a profit out of it for the first two or three years in the case of an apartment," says Ms Warner. "If you are lucky, you will break even, but you may have to subsidise it for that period."

Ms Cahill, of Home Locators, agrees: "If you are buying for the long haul, perhaps to have something on hand for children growing up and going to college or settling down, you will be okay. But people buying for rental will be some time making anything out of it and, even then, not much."

In the short term, it seems unlikely the pressure will ease, although the increase in density under new planning regulations should help supply somewhat in time. Most professionals in the business are placing their hopes on the recommendations of the report of the Commission on the Private Rented Residential Sector, which is currently with the Minister of State for the Environment, Mr Robert Molloy.

"The report addressed issues such as supply, security of tenure and rent certainty," said Mr Cooke of the IAVI. "No-one has been happy with it in its entirety, which may well mean it is doing something right. It comes down solidly on the need to increase supply, including the abolition of the 9 per cent stamp duty rate and the widening of tax incentives.

"Most of the commission recognised that if you increase supply, the rest will be sorted. What the Minister needs to do is to accept the report in its entirety and not cherry-pick or embellish it," said Mr Cooke.