Rents have soared because of a record low number of available rental properties in a "crisis" that analysts predict is set to worsen.
Capital city asking rents jumped 11.8 per cent in a year, after a 2.2 per cent rise in the month to April 12, according to SQM Research.
Capital city house asking rents surged 14.7 per cent in a year, while unit rents rose 11.2 per cent.
"The reality on the ground will be that many families, many young people will not be able to find the home that they actually require," Louis Christopher, managing director of SQM Research, said.
A return to the city in the nation's biggest capitals is driving up the cost of rent. Asking rents for units in Sydney's CBD rose 5.5 per cent in the last 30 days and 7.4 per cent in Melbourne's CBD.
Both areas were among those that saw rents fall most when COVID-19 stopped migration into Australia.
Across the capital cities, rents fell more than 1 per cent during the pandemic, according to the ABS inflation figures, which look at all rents, not just asking rents for homes currently advertised for lease.
The latest ABS data to December show rents were up just 0.4 per cent over the previous year, however a rise in asking rents generally filters through to existing tenants with a lag as their leases expire and they sign new ones.
Brisbane recorded the largest yearly jump in combined house and unit asking rents, up 15.2 per cent.
The steep increase in asking rents for advertised properties is being driven by the low number of available rentals.
"We have a real issue on our hands," Mr Christopher said.
The national residential property rental vacancy rates fell to 1 per cent in March, down from 1.2 per cent in February.
"This represents half the total number of vacancies reported as of 12 months ago and the lowest vacancy rate since 2006," Mr Christopher said.
"And the recent monthly data suggests we are still not at the worst point of the crisis. We were thinking at least regional Australia may have started to have some relief as people return back to the cities. But that has not happened as yet."
Mr Christopher said many localities and towns had rental vacancy rates close to zero.
"Clearly, we are not going to resolve this overnight, but I do hope the various state and territory governments will ramp up their rental assistance packages in order to cushion the rental accommodation emergency we have here and now.”
House prices fall but buyer interest still high
Rents are rising at the same time as house prices are falling across much of the country.
The percentage of suburbs with house price declines in the March quarter was 46.8 per cent in Melbourne, 38.6 per cent in Sydney, 10.9 per cent in Hobart, 13.4 per cent in Perth and 18 per cent in Darwin, according to CoreLogic.
The housing market has remained strong in Adelaide and Brisbane, with no suburbs in those cities recording house price declines.
CoreLogic's quarterly figures showed national dwelling values rose 2.4 per cent, which is lower than the 5.8 per cent recorded in the same period in 2021.
The head of research at CoreLogic, Eliza Owen, said the quarterly figures confirmed there was a shift from a prolonged period of broad growth to a multi-speed market that differed between capital cities, regions and property types.
“It is likely that slightly tighter lending conditions and higher average fixed rates are hitting the very top of housing markets first," Ms Owen said.
The Melbourne suburb with the biggest drop in value was Cremorne, down 6.4 per cent. In Sydney the steepest decline was 5 per cent in Beaconsfield.
Interest in property mixed
Nationally, monthly online property search volumes fell 8 per cent in March, and 11 per cent from March 2021, according to REA Group's PropTrack Housing Market Indicators Report April 2022.
On a monthly basis, search volumes have dropped off in every state by varying amounts, the report noted.
Views per listing fell 1.2 per cent in March. However, nationally, views per listing were 24.3 per cent higher than the same time last year.
Monthly views per listing were strongest for properties in Melbourne and Adelaide, up 3.2 per cent 2.9 per cent respectively.
Some buyers appear to have accepted they will need to pay more for properties.
In the combined capital cities 50.1 per cent of searches in March were for properties listed at a price over $1 million. A year ago, that share was 42.3 per cent
First-home buyer enquiries in March were 8.8 per cent higher than a year ago, but have fallen 36.3 per cent from the peak recorded in September 2021.
PropTrack senior economist Eleanor Creagh said demand from buyers continued to moderate, while more sellers were listing their properties before the election and rate rises.
"Sales volumes remain strong, so far tracking the start of 2021 almost like-for-like," Ms Creagh said.
Interest rate hike cools housing market
Reserve Bank modelling estimates housing prices may fall 15 per cent if interest rates rise 2 percentage points.
Banks are already moving to lift mortgage rates ahead of the Reserve Bank of Australia's expected rate rise in June.
The average big four bank 3-year fixed rate for owner-occupiers has risen 2.02 per cent in a year, according to RateCity.
"This is the fourth time CBA has hiked fixed rates this year," RateCity research director Sally Tindall said.
Australia’s largest bank, CBA, this week lifted fixed rates by up to 0.50 percentage points for owner-occupiers paying principal and interest, and up to 0.90 percentage points for some investors.