Rents are rising because property investors have cashed out to reinvest in Superannuation

House rents have risen at their highest rate in 18 years because investors have sold property assets to boost their superannuation, housing economists say.
And an interest rate rise next week would make buying a home even harder for those hit already with higher rent.
University of Sydney economics faculty academic and housing specialist Judy Yates said Treasurer Peter Costello's super laws encouraged investors to pull out of the housing market just when rental demand was growing.
"Just at a time you had increasing demand for rental properties, you had a cutback in rental properties coming into the market," said Associate Professor Yates, who is also an Australian Council of Social Service housing policy adviser.
Under changes to superannuation laws, investors could deposit up to $1 million post-tax into their super before June 30.
Since then, a $150,000 post-tax super limit has applied.
Housing Industry Association (HIA) chief economist Harley Dale said the high cost of residential building had made one-off superannuation contributions a more attractive option.
"There's no doubt that in the first half of the year, the superannuation laws did divert funds away from other areas," Mr Dale said.
"Rental investment property was one of these. There's a bit of coincidental timing."
Rents rose by 1.6 per cent in the three months to June to record their biggest quarterly jump since September 1989, the Australian Bureau of Statistics revealed in its consumer price index release last week.
Mr Dale predicted rents would climb at a faster pace in coming quarters, even though investors have lost their chance to make a $1 million post-tax super contribution, as building costs remained high.
But a Hobart-based researcher with the Australian Housing and Urban Research Institute Keith Jacobs said diminished funding for public housing also had pushed up rents as competition for accommodation intensified.
"The reason why you have such a rental increase is because the opportunity for low-income households to rent in the public sector is very, very limited," Dr Jacobs said.
The HIA argues that rental affordability is low because land prices are up to four times that of building costs.
Dr Jacobs refutes the HIA's call to release more land, saying this would favour developers who are more interested in building homes for wealthy owner-occupiers.