He was speaking after it emerged Justice Minister Alan Shatter was considering legislation to give all homeowners a right to light.
The move would be an attempt to address situations in which trees and hedges are being allowed grow out of control in suburban estates, leading to tensions among residents.
Mr Connolly believes one of the worst things that can happen to someone is a neighbour dispute.
"You have situations in which people are so stressed about the uncomfortable situation they find themselves in with their neighbour that they are watching what time they might leave the house and what time they might come home so they don't engage," he told the Herald.
It is a long-term problem, with those involved feeling trapped.
They think "we are stuck here, we can't sell the house, we can't leave here" and that is "really, really serious", said Mr Connolly, who runs the Connolly Counselling Centre in Stillorgan, South Dublin.
"It has a huge, serious effect on people's sleeping, people's stress levels," he said.
And the fallout can spill over into family relationships.
Mr Connolly said there can be "real bitterness" between a husband and wife when there is a difficulty with an adjoining resident.
He pointed to the scenario where the husband might be working and his wife is left to deal with a problem neighbour during the day.
The psychologist welcomed the right to light proposal, which was raised with Mr Shatter by Junior Environment Minister Jan O'Sullivan and Dublin North East TD Tommy Broughan.
Mr Connolly said: "It's a very good thing because you have these people planting these enormous big trees in small gardens.
"I think it's absolutely crazy and it does affect you neighbour. The whole idea of being kind to your neighbour seems to be gone out the window."
Mediation Northside, set up in 2004 by the Northside Community Law Centre, is one of a growing number of organisations which helps neighbours to solve their differences without recourse to the courts.
"We are impartial, we listen help you identify the problem and help you find a solution suitable to all parties involved," said its director of services Valerie Gaughran.
The Coolock-based service has seen a "very high volume" of cases since the recession began, Ms Gaughran told the Herald.
One of the reasons has been that many people who would have been at work before are now at home during the day, causing increased difficulties at times between neighbours.
Mr Broughan raised the issue of leylandii hedges, which tend to sprawl rapidly and block light to adjoining properties.
While other jurisdictions have introduced rules forcing homeowners to control the plants, no such legislation exists in Ireland.
Mr Broughan wants to see a two-metre height restriction.
Mr Shatter's office says the issue of overgrown trees and blocked light is being considered by the Department of Justice.