Rental growth across Australia's capital cities stalled in the June quarter, according to reports from the country's largest property data providers.

Figures from both Australian Property Moinitors and RP Data have revealed that rental growth slowed to a crawl in the second quarter of the year -and also indicate the trend may well continue into the second half of the year.

Both reports indicate that national rental growth has barely kept pace with inflation, although some areas have shown faster growth. RP Data reports Sydney topped the major cities with a 4.7% quarter increase in rent for units, with Hobart and Darwin showing falls in asking rents for houses and units respectively. APM's report also highlighted that Sydney showed an increase in median asking rents for houses, but also highlighted the Canberra was the only capital city to see a rise in both house and unit rental prices in the quarter.

Senior economist for APM, Dr Andrew Wilson, said the current situation goes against what many expected.

"Despite signs earlier this year pointing to a tough time ahead for renters, the reduction in buyer activity, particularly from first home buyers, has not resulted in a significant increase in rental prices," he said.

But RP Data's Cameron Kusher said the lack of first home buyers and the limited new supply of housing may increase competition amongst tenants.

"This activity may be beneficial to investors who could see a boost in rental rates as vacancies tighten and fewer new dwellings continue to commence construction," he said.
In Australia's regional markets, Fitzroy recorded the strongest quarterly rental growth for houses at 6.1 per cent, but it's the WA investment hotspot of the Pilbara that demands the highest median rent at $1,600 per week.