Melbourne has replaced Adelaide as Australia's most affordable city for renting a typical home, latest figures show. 

Rents in all eight capital cities rose in April to June 2022 and year-on-year, CoreLogic data released on Wednesday shows.

At the same time, Australia's rental market continues to tighten as national vacancy rates fell to 1.2 per cent from 2.2 per cent this time last year.

The worsening affordability comes amid the Reserve Bank of Australia lifting the cash rate for a third time in recent months.

Bucking the trend since COVID-19 begin, rents in capital city dwellings have increased more than regional Australia, though both surged to 3 per cent and 2.7 per cent respectively.

CoreLogic's quarterly rental review attributes the growth in rents to a combination of low supply and higher demand due to shrinking household sizes.

CoreLogic research director Tim Lawless said rental demand will continue to rise with more people coming to Australia from overseas.

"With the exception of Darwin, the strong rental growth seen over the past year has led dwelling rents across all of the capitals to reach new record highs," Mr Lawless said.

"Despite growing affordability concerns, rental markets are expected to remain tight for some time yet partly due to a shortage of supply following a long period of low investment activity between 2015 and 2021, but also due to renewed rental demand as international migration recovers.

"However, this will likely be offset by additional rental demand as international migration returns to pre-COVID levels."

Melbourne homes cheapest to rent

Melbourne now takes the crown for the cheapest rental market, with a typical dwelling renting for $480 a week.

Adelaide's rents have increased to $492 a week with rental growth up by 4.3 per cent — its strongest quarterly growth rate since CoreLogic started recording in 2005.

Adelaide also has the tightest rental market, with only 0.3 per cent of houses and units vacant in June.

But units in Adelaide are still the cheapest around the country at a median weekly rent of $405.

Canberra remains the most expensive place to rent, with a typical property renting for $690 a week.

Adelaide single mother Alicia O'Sullivan said she would rather pay an increase of $15 a week in rent than risk finding a new place.

"I felt like I had no choice but to sign that, because it's really hard to find new rentals around," she said.

"There is a lot of demand out there. I really just couldn't afford to give up this place to find somewhere I might not find."

Ms O'Sullivan said she preferred not to move to a new home that may be more affordable but further away from her teenage son's school.

She said she has been buying more frozen and canned food to cope with the rent increase.