A severe shortage of apartment rental supply could lift rents a further 13% in some inner-city districts next year as demand rises further, CBRE analysis shows.

An estimated 570,000 apartments are needed over the next three years across Australia’s capital cities – however, only 55,000 apartments are currently being built each year, according to Sameer Chopra, CBRE’s Pacific head of research.

“This significant mismatch between apartment supply and demand will help drive continued rental growth in key city centre areas,”  Chopra says. “We won’t see 30% rental growth like we’ve seen in the past year, but we’ll still see close to 10% rises because demand continues to outpace supply.”

Rental demand is expected to climb by 34,100 across Sydney next year, fuelled by strong population growth, but only 15,300 apartments are available, according to CBRE’s estimates.

In Melbourne, the rental market will be short by 23,800 apartments, Brisbane by 12,100, Perth by 10,500 and Adelaide by 4100.

“Some precincts will see larger population growth than others, with vacancy issues to be most acute in the inner-city major city centres and associated near-city suburbs,” Chopra says. “In most precincts around Australia we’re expecting 0.2% to 0.5% apartment vacancy contraction in the next 12 months. This comes at a time when 80% of precincts have a sub-1.5% vacancy and will be a key driver of rental growth.”

Sydney’s inner west (up 13%) and north-east Brisbane (10%) are predicted to lead the rental increases.