Rent rises 'higher than inflation'

A SHORTAGE of new home construction is pushing rents up more than nine times the rate of inflation, a development lobby group says.

Average Sydney rents rose by $10 a week in the past three months, and by $20 a week in the past year, quarterly figures compiled by the Real Estate Institute show.

According to Urban Taskforce Australia, which represents property developers, the median weekly rent for a two bedroom home in inner-city Sydney suburbs is now $540 a week - $25 more than what it was three months ago.

A three-bedroom in the same region on average sets renters back $725 a week - up $25 in three months.

Urban Taskforce's chief executive Aaron Gadiel says the increases are running at more than nine times the rate of inflation.

The most expensive one bedroom apartments are in Sydney's inner-east and on the North Shore, the Real Estate Institute's latest figures show.

One bedroom homes at Willoughby, North Sydney and Mosman command average weekly rents of $400, while at Waverley and Woollahra, in Sydney's east, one bedroom homes are, on average, $420 a week.

Mr Gadiel blames the high rents on a lack of new homes being approved and built.

"The shortfall hits Sydneysiders hardest," he said in a statement on Tuesday.

"No Australian capital city approves less new homes per head of population than Sydney.

In the past financial year, Mr Gadiel said 15,000 apartments and townhouses had been approved in Melbourne, compared to 11,000 in Sydney.

He called on local, state and federal governments to focus on reducing the shortage of housing in Sydney.