Apartment rents have surged over the past year, delivering income windfalls of up to $11,000 for investors across suburbs gaining the most.

The sharp rental increases – with 57 suburbs rising more than 20 per cent – have come as vacancies hit a new low of 0.9 per cent across the combined capital cities during February, CoreLogic data shows.

They also reflect rising demand for the cheaper, high-density sector as renters trade space for affordability, said Corelogic research director Tim Lawless.

‘‘Rental affordability pressures may be forcing a transition of demand towards higher-density rental options, where costs tend to be lower,’’ he said.

‘‘Additionally, the strong rebound in foreign student and international migrant arrivals would be adding to rental demand, particularly in inner-city precincts as well as areas close to universities and transport hubs.’’

Suburbs in Sydney’s inner south, eastern suburbs and inner west dominated the list of the top 10 biggest gainers, led by the Sydney-Haymarket-The Rocks area, where unit rents climbed 27.8 per cent or $211 a week to $969 – a $10,972 annual rental gain.

Meanwhile, apartment rents in the Waterloo-Beaconsfield, Kingsford, Redfern-Chippendale and Arncliffe-Bardwell Valley areas rose more than 27 per cent, or $171 a week on average.

Melbourne topped the areas with the fastest rate of rent rises for apartments over the year, climbing 38 per cent and adding $168 to a $612-a-week rental.

Five other inner-city areas also notched up more than 21 per cent annual rental gain, including South-bank, Carlton, Docklands, North Melbourne and South Melbourne.

In Brisbane, the Margate-Woody Point area north of the central business district, and four other inner-city areas including Kangaroo Point, West End, Spring Hill and Fortitude Valley all recorded more than 20 per cent rental increases in the past year.

However, rental growth for houses has slowed as worsening affordability and the higher cost of living weighs on tenants’ budgets.

‘‘We have already seen some evidence that rental growth is topping out, especially in the more expensive low density sector, where rental growth was much stronger through the pandemic,’’ said Mr Lawless. ‘‘This easing in rental growth has nothing to do with a supply response or less overall demand – it probably has more to do with renters reaching a ceiling on what they are able or willing to pay.

‘‘With rental growth substantially outstripping incomes over the past few years, it is likely more renters will be looking for alternatives to ease their rental payments.’’

Canberra posted the sharpest slowdown in house rents, easing from a 10.5 per cent annual increase at the height of the pandemic to just 0.8 per cent over the year to February.

In Sydney, house rents stabilised at 8.9 per cent annual growth during the past three months, slower than the pandemic high of 10.2 per cent. All the other capitals except Melbourne posted slower gains for houses in recent months.

But with vacancy rates staying around record lows, rents were likely to continue to rise at least through the rest of the year, Mr Lawless said.

‘‘Over the short to medium term, the rental supply outlook is looking pretty glum,’’ he said. ‘‘From a new dwelling perspective, approvals are at their lowest level in more than a decade.’’

Private-sector investment, another indicator of rental supply, was also still going backwards, as investment home loan numbers had been declining since early last year, Mr Lawless said.

‘‘Against this scenario of limited new rental supply, demand looks set to rise further, based on the influx of overseas arrivals,’’ he said.

Kent Lardner, founder of data provider Suburbtrends, said vacancies were likely to fall further as rental demand continued to outpace supply.

‘‘The rental supply in the near to medium term is alarming. Building approvals are well below population growth rates,’’ he said.

‘‘Based on my analysis of building approvals over the last five years and comparing those to population growth, around 95 per cent of suburbs nationally will have inadequate rental supply in the coming years.’’