Rents in Australia set to skyrocket

High demand and low apartment vacancy is expected to push rental rates up sharply for the next two years.

According to BIS Shrapnel's Residential Property Prospect, 2009-2012, they foresee an annual rate rise of 5% in the country's major cities.

The report indicates that Sydney will have a vacancy rate of under 1% next year and rents will rise by 7%.

Investor demand and the increased number of renters becoming home owners is expected to drive up house prices.