Capital city rents have grown below inflation over the past year, RP Data has stated.

New figures from the company's June quarter Rent Report show rental rates increased 2.9% nationally over the past 12 months, and 2.7% in capital cities.
The growth is markedly slower than the five-year average annual growth in capital cities of 7% for houses and 7.9% for units. RP Data analyst Cameron Kusher said the trend of slow rental growth has been evident since 2008. Kusher said despite the slowdown, inactivity of first home buyers and an under-supply of new housing could lead to growing demand for rentals.

"This activity may be beneficial to investors who could see a boost in rental rates as vacancies tighten and fewer new dwellings continue to commence construction," he commented.

Among the capital cities, Darwin is the most expensive in which to rent houses, with a media advertised rent of $520 per week.

Canberra ranked as second-most expensive at $500 a week, followed by Sydney at $460 per week.

Sydney ranked as the most expensive city for unit rentals at $450 a week, followed by Canberra at $430 a week.