“The cost of living and the impact on household budgets is going to be evident for renters … and we’re likely to see those others [suburbs yet to see an increase] move into positive annual growth.”

She said the recovery has been driven by fast falling vacancy rates – from almost 6 per cent at the height of pandemic down to almost 1.5 per cent, as renters compete with priced-out buyers – returning students and migrants.

Sydney tenants looking to capitalise on falling rental prices would need to consider areas in the outer suburbs like Prairiewood, 34 kilometres west of the CBD, down 10.7 per cent to $460. The biggest drop in unit rents was in South Wentworthville, 28 kilometres west of the city, down 9.1 per cent.

Moving further out is not an option for inner-west renter Zoe Davison, 23, who needs to live close to her university and work.

Davison spent weeks searching for an affordable rental with two other housemates but faced fierce competition.

After supplying extensive paperwork, including rental history, references, bank transactions and savings and offering $20 more than the asking rent for a house, Davison was finally approved.

“I cannot stress enough how stressful that process was … we were accepted two days before we were going to be homeless, we would have been couch-surfing,” she said.

“The standards are not meeting the price we’re paying, it’s not good value for money. They can just get away with these things because the rental market was so in their favour.”

With a $250 budget, she said living in a share house had become a necessity rather than a choice: “There’s no way I could live by myself,” she said.

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“I’m going to uni, I have a job, and I’m struggling to get by. I’m studying to be a teacher. That takes five years … you have to make so many compromises, lower your standard [of living] just to live somewhere, and you have to say thank you.”

The Australia Institute’s Centre for Future Work senior economist Alison Pennington said the pandemic housing boom increased the intensity of competition for “forever homes” and stability, widening the gap between housing haves and have-nots.

“Dual income households, borrowing more under conditions of near-zero interest rates, add in the Bank of Mum and Dad, and we saw a lot of house price increases for detached houses, in general, and that surge has displaced a large number of renters from detached houses.”

The Australian Council of Social Service (ACOSS) CEO, Dr Cassandra Goldie, said people on lower incomes were being priced out of major cities and some regional areas.

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“Those relying on income support payments and unable to access social housing, have few housing choices and are often forced to live in situations that are unsuitable, unsafe, inaccessible or isolated from services and jobs,” she said.

“Rent assistance is just $73 a week for a single person and hasn’t been increased in real terms in over 20 years. Rents have increased dramatically, especially in regional Australia where they have risen by 18 per cent in just the last two years.

“How is someone on JobSeeker, on $46 a day – just $16,700 a year – supposed to pay the rent or buy a home? How is a pensioner in severe rental stress going to buy a home?

“Without major housing policy changes, this situation is likely to continue to deteriorate. The next federal government has to address the housing affordability crisis head first.”