Rents are tipped to keep rising and are unlikely to hit their peak until early next year according to new analysis by Westpac.

Westpac Business and St George senior economist Pat Bustamante says the situation is likely to be longer and more severe than previous rent rise cycles.

He predicts asking rents will increase by 11.5% this year, resulting in a national asking rent of $633 a week.

“Given the current supply and demand dynamics, and the lag in supply, the peak would likely take longer than people expect,” he says.

“The return of migrants and international students is providing an important injection of labour supply, but it’s also putting a further strain on the rental market.”

Bustamante says supply is sluggish at the moment as a result of rising interest rates and a lag between approvals and construction.

“Which means we’re unlikely to see a reasonable amount of new supply until the middle of 2024,” Bustamante says.