Australia's spiralling house prices are putting pressure on the rental market, forcing low-income earners to the outer suburbs while potential buyers save for a deposit, a peak advocacy group says.
The Rental Affordability Index is released every six months and compares household incomes with rental prices across the country.
Authors of the latest report said despite rental affordability remaining relatively steady in some parts of the country, pensioners and working families were still being priced out of all metro markets.
Sydney and Hobart are the worst cities for renters, while Perth and Melbourne are the most affordable.
Adrian Pisarski, from National Shelter, one of three organisations behind the index, said high house prices were having a knock-on effect on renters.
"Lots of frustrated renters can't get into home ownership and they stay in the rental market," he said.
He said many low-income households were paying up to 70 per cent of their income on rents.
The report assumes if housing costs exceed 30 per cent of a low income household's gross income, it will impact their ability to pay for other essentials such as food, power, water and transport.
