The warning is aimed at people planning to move to Ireland and notes that new arrivals, such as students, will face “significant difficulty” finding housing.
It has also warned that rent is “more expensive than Paris” and that pets are not allowed in most rental properties.
“Ireland is currently experiencing a severe housing crisis.”
“Newcomers (including students) face significant difficulties in finding accommodation.”
“The strong demand and the saturation of the rental market have led to a sharp increase in rents, which are currently much more expensive than in Paris, including in shared accommodation,” the warning continues.
“It is therefore advisable for people planning to settle in Ireland to allow sufficient time for this search for accommodation (which can take several weeks).”
The embassy has also warned people to be vigilant of scams and advises not to sign a contract or pay a deposit without having visited the property and met the owner or real estate agency.
“It is essential to have solid financial guarantees and, if possible, certificates of payment of rent from your previous owners (“reference letter”) in order to be able to present a rental file.”
In August it was revealed how rental price rises had hit an all-time high, with supply at its lowest level since Daft.ie records began in 2006.
The cost of accommodation shot up by 12.6pc in the three months to June when compared to the same period last year, according to the Daft.ie asking price survey.
This is the highest level of rental inflation since Daft first started compiling the rental index 16 years ago.
The average monthly asking price hit €1,618 due to a chronic shortage of supply as small landlords leave the market in their droves.
There were just 716 homes available to rent in the entire country on August 1, 2022, compared to a whopping 23,400 in August 2009.
The average monthly asking price for a new rental in Dublin is now €2,170 in Dublin.
However, rental asking prices are up 3.3pc in the first three months of the year, according to Daft.ie.
The annual rental inflation rate of 12.6pc is higher than the previous peak of 11.8pc recorded in late 2016.
It comes as figures also showed how small-scale landlords are leaving the market in record numbers.
The number of termination notices issued by landlords to tenants, as notified to the Residential Tenancies Board (RTB), shot up by 58pc in the first six months of 2022 compared to the previous six months.
Rising interest rates, high property prices and complaints about regulation and taxes are cited as the reasons so many smaller landlords are selling up.
Daft.ie rental report author, and Trinity College associate professor, Ronan Lyons said the scarcity of homes was unprecedented over the past year.
The 716 homes available to rent on August 1 was down from almost 2,500 a year ago.
And it is a new all-time low since Daft took stock of rental supply back in 2006.
Rental availability is now down almost 100pc since 2009.