Reserve Bank of Australia governor Philip Lowe has warned that not enough homes are being built to house an influx of migrants, predicting that rents will continue to rise in a further hit to household budgets.

A major driver of inflation is the rapid increase in the cost of renting a property, which is the second-largest component of the Consumer Price Index. Advertised rents have increased by 11.5 per cent over the past 12 months, research house SQM says, while just 1 per cent of rental properties are available for lease.