Rental markets across the country are responding to low vacancies, with the March Quarter recording the highest growth in average national rents since 2007.

There was a 3.2% rise in rents nationally in the March Quarter, which also marked a recovery in inner-city markets, with unit rents rising 2% for the combined capitals.

There are, however, wide discrepancies among cities, with growth subdued in Sydney and Melbourne, the only major markets with high vacancy rates.

Regional markets have continued their strong run, with rents climbing 4.1% in the March Quarter, after rising by 2.9% in the December Quarter. Regional units recorded the highest quarterly rental growth of 4.8%, compared with a 4.0% rise in house rents.

“At one end of the spectrum, we have Perth and Darwin where annual rental growth is well into double digits and accelerating,” says CoreLogic research director Tim Lawless. “At the other end is Melbourne and Sydney where rents are down over the year.”