Deepening rental crisis sparks urgent plea for action

As the nation's housing crisis intensifies, Australians are being warned the spiralling cost of rent threatens to affect everyone.

Two ideas - and the politicians pushing them to help renters across the nation - might need to work together as the long-term trend of worsening affordability continues.

About a third of Australian households rent but the impacts are far-reaching.

"Increases in rent have actually been contributing to the inflation ... managing rent rises is really quite critical, not just for the households renting, but for the wider economy," economic consultancy firm SGS Economics and Planning principal and partner Ellen Witte told AAP.

Ms Witte is the lead author of the firm's latest rental affordability index released on Friday alongside low-income housing advocates National Shelter.

A decade into tracking rental affordability, the index warns the housing crisis has deepened as rents continue to grow faster than wages.

The latest index adds a new category for places where the rent is "critically unaffordable" and would require households to pay 75 per cent of their income.

"Obviously, that's not doable, so we now see entire cohorts of the population being pushed out of key areas where there are a lot of jobs, services and transport," Ms Witte said.

Addressing rental affordability is often relegated as a job for states and councils, while those struggling to afford rent in capital cities are sometimes told to move elsewhere.

"That argument doesn't go up anymore, because it's not affordable to rent anywhere," Ms Witte said.

In national action to help renters, the Greens want caps on rental increases, while the Labor government has boosted Commonwealth Rent Assistance, which not everyone is eligible for.

It also risks funnelling taxpayer money to landlords if there are no restrictions on increases amid low vacancy rates.

"We don't necessarily say cap it entirely, but just be reasonable - or just prevent excessive rent increases," Ms Witte said.

Housing Minister Clare O'Neil said rent caps were a state responsibility and could reduce supply, worsening affordability.

The government was trying to get more homes built and allow fewer international students, and would work with states to ban no-grounds evictions, rent-bidding and to limit increases, she said.

In Sydney, where the index reports rents are significantly higher than other locations, the NSW government has passed reforms aimed at the latter three issues.

Its rent increase limits apply to the frequency, not the amount.

Greens housing spokesman Max Chandler-Mather said renters were paying the price of inaction.

"Unlimited rent increases should be illegal," he said.

States are working to meet housing targets hoped to build 1.2 million homes by 2029, but Mr Chandler-Mather said the federal government needed to get involved too.

Swinburne University housing professor Wendy Stone said policy interventions to bring down rental prices were urgent.

"The widening wealth divide between renters and owners will continue to have intergenerational and whole of lifetime impacts," she said.