The most expensive 10 per cent of rentals have soared by 10 per cent in the year to February compared to seven per cent for the cheapest 10 per cent of properties, new Australian Bureau of Statistics figure reveal.

But lower-income households that rent less-expensive properties suffer more from increases because they spend more of their money on essential items and tend to have smaller financial buffers.

The biggest rent increases are hitting new tenants, while those renewing their leases and staying put endure relatively moderate rises.

More than 60 per cent of properties with new tenants experienced rent hikes of 10 per cent or more in the past 12 months, compared to one-quarter of tenants experiencing hikes of that proportion in their existing properties.

The analysis by Michelle Marquardt and Fred Hanmer also found rents in some areas in inner city Melbourne and Sydney were still below pre-pandemic levels.

While rents have been heading upwards, in inner city areas they have been lifting from a lower base after closed borders and other pandemic disruptions reduced demand for rentals in these areas.

The pandemic also sparked a desire for more space and led to 120,000 new households being formed, including some new rentals.

Coupled with the return of international migration, particularly students, demand for rentals in major cities is rising fast.

"The rental market has tightened considerably since 2021," the ABS report concluded.

"Rent increases have also become more common, and larger on average."

Housing Minister Julie Collins said the Commonwealth was working with all levels of government to ease rental stress.

The government's signature policy, a $10 billion future fund for social and affordable housing projects, has been criticised by key crossbenchers as out of step with the scale of the problem.

The policy needs the support of the Greens and two independent senators to pass the upper house.

"The Senate now has a once-in-a-generation opportunity to create a secure, ongoing pipeline of funding for social and affordable rental housing over the long term," Ms Collins said.

Australian Associated Press