There may be talk of an impending oversupply when it comes to apartments, however it has not been reflected in most capital city rental prices.
In the year to March, Melbourne saw the biggest increase: up 4.1 per cent, with the median weekly rent at $380.
Sydney remains the country's most expensive capital, setting tenants back $520 a week on average. This is a rise of 4 per cent, and is despite a record number of new dwellings coming on to the market.
Nearly 90,000 apartments were approved to be built in Sydney since the beginning of 2013. That is 2,000 more than Melbourne, with more to come.
Andrew Wilson, Chief Economist at Domain, says the rising rents indicate fears of an oversupply are unwarranted for the moment.
"We must recognise there is still a lot of new development yet to come into market, and that may assist in re-balancing the never ending increase in rents for tenants, but for the moment there is absolutely no sign of rent relief in any of the capital city markets."
He adds, tenants are having to make some tough choices.
"Clearly there's an undersupply. We're seeing that the shortage of house rentals are pushing tenants into the unit market, and we're seeing unit rents rising as a consequence."
While this is bad news for tenants, it is good news for landlords.
Gross rental yields are above 5 per cent in most Australian capital cities.
Alexander Katyk and Katie Koo rented apartments in Sydney's inner suburbs for just over two years, but were frustrated by the rising rents.
Source: Domain
"Just because they offer a small view or a convenient location, and a lot of places that are reasonable price points within close suburbs to the city are unfortunately older style of buildings," says Alexander Katyk.
Katie Koo says they decided to forgo convenience, looking west to buy their own apartment.
"It just makes more sense for the long term to invest all your money to your own mortgage, than someone else's mortgage," she said.
They have less disposable income, and it now takes longer to get to work, but Alexander says the local parks and cafes make up for it.
"We've made sacrifices. I think it's no secret if you go out and buy a place in terms of what you're going to be committing as part of your salary - is substantially more than when you rent, but I guess the benefit is you get some stability."
