Rents are surging at record rates and are tipped to keep growing, especially in the major cities.

Asking rents lifted 4.3 per cent in the September quarter – the fastest increase ever recorded by PropTrack.

In the June quarter, rents lifted by 2.2 per cent according to the real estate valuer.

Soaring housing costs are largely a product of low vacancy rates, the report says, as landlords can afford to lift prices when renters are competing over low supplies of rentals.

And the rental crunch shows no sign of easing, particularly in the major urban centres.

“Capital cities are expected to see the lion’s share of growth as demand and subsequent rental price growth softens in the regions,” the report says.

“With the supply of rental stock remaining extremely tight and migration to Australia lifting, we anticipate rents to continue to rise over the coming quarters.”

Capital city rents drove the growth in the third quarter, lifting by 3.2 per cent for the quarter and 8.8 per cent in the year to September.

Unit rents in Sydney and Melbourne grew fast, which followed a drop-off in demand for inner-city apartments during COVID as people opted for more space.

Regional rents remained unchanged from the June quarter, but were still up 12.5 per cent year-on-year.

Housing affordability has been eroding, according to a recent Productivity Commission report, which found the average low-income renter spends more than one-third of their income on rent.

The report also found Commonwealth Rental Assistance was falling behind fast-growing rents, leaving low-income renters vulnerable.

– AAP