Dublin's city centre has witnessed a definite resurgence in rents. More and more people want to be based close not only to work but to social life. Young people, in particular, are anxious to avoid the exorbitant expense of running - and insuring - a car.

The city centre has become more user-friendly with the proliferation of convenience stores and pharmacies, as well as coffee shops. Sought-after areas include both sides of the quays and throughout Dublin 1, 2, 3, 4, 7.

With all routes into the city under increasing commuting pressure, being close to work is an attractive option. There is even a trend for some commuters to live in the city and commute in the opposite direction.

Denis Kavanagh, of Gunne Residential's letting division, says the city is "very popular" at the moment. "Companies in the financial services areas and other corporate clients are venturing into the city centre, whereas before they would have stayed in the south city. They are encouraging staff to be in the city," he says.

And prices are taking off as well. "I would estimate that rents are up about 10 per cent. Last year, we would have got between £775 and £800 for a two-bed apartment in Exchange Place, off Townsend Street. Now we are getting a minimum of £850." The 16-apartment block is rented entirely to the corporate clients.

Temple Bar is a big hit with the late 20s age group. "They don't mind the noise. They accept that, if they are renting in Temple Bar, it will be noisy."

The company recently had a large two-bed apartment in The Friary, complete with a mezzanine level, which rented for £1,000 to a corporate client. Meanwhile, Hooke & MacDonald is offering a two-bed apartment in the Printworks to rent for £800 a month.

Other city rents include £850 for a two-bed at Customs House Docks and £1,000 for a two-bed in Talbot Street, through Gunne Residential.

Also doing exceptionally well is the Gardiner Street area. "The purchase price for investors was low here but the rents are rising with £500 the going rate for a one-bed and £650 for a two-bedroom unit." says Denis Kavanagh.

Fisherman's Wharf or Charlotte Quay, in Ringsend is now considered "further out" for some tenants. However, despite the slight distance from the city centre, rents are just as strong in this area. "We are getting around £600 for a one-bed here and £850 for a two-bed but a lot of the younger people in particular quibble about being out of town although Dublin 2, 4 and 6 will always be the big letting areas."

According to Roi McCann, of Christies, when the choice is between buying a home a long way from the city or renting an apartment centrally, many are voting with their pockets by renting close to the city. Rents in Dublin's city centre are now on par with levels in other European cities. She says it is not such a surprise for corporate clients who have a good budget and tend to know what to expect, "but it's a real shock for Irish people coming back to live in Dublin".

Hooke & MacDonald also reports a strong upsurge in city centre lettings, "much more so than in any previous years", says Carina Warner, residential lettings manager with the agency. "In particular, areas such as Smithfield and Christchurch have been in strong demand and rents in these areas have increased to an average of £700 a month for a typical two-bedroom apartment." She adds that "the ongoing rejuvenation and new facilities in the Smithfield area has attracted very good quality tenants." The opening of Chief O'Neill's Hotel, and Ceoil - the Irish music museum, in Smithfield has helped contribute to a lively atmosphere in the area. Smithfield is also popular with people working out of town. "A number of workers with IBM for instance, were keen to rent in the Smithfield area."

Carina Warner points to Number 1 Jervis Street, a bright and modern block right in the heart of the city that has been doing well. Rents there for two-beds are from £700 to £750, or £600 for a one-bed. The interest in these apartments is strong even though no parking facilities are included.

Parking is a huge factor of course, but tenants divide on whether they need it or not. Katherina Cahill, of Home Locators, says that tenants looking for an apartment with a parking space can expect to pay extra. Rents without parking in College Gate or College Close, in Townsend Street, range from around £550 to £650 for a one-bed, with a parking space adding from £50 to £100 to the rent.

The popularity of the city centre with students has added a competitive edge to the market. There is also a strong demand for three-bedroom houses in the inner suburbs, says David Lewis, of Sherry FitzGerald. Not only are the redbricks off the South Circular Road extremely popular with tenants, but Harold's Cross and Phibsboro does well, with rents for three-beds from around £800 to £850. Space is at a premium anywhere in the city. Some of the properties in the Liberties have roof gardens and the Custom House Docks area has water. Rents there for two-bedroom apartments are between £800 to £1,000, through Home Locators, but a parking space would be included.