Surging rents fuelled by housing supply shortages have pushed rental affordability to its worst level in 17 years and will keep pressure on inflation for some time yet, a new report warns.

Lower-income households are being hit hardest by rising rents, and the poorest fifth – those earning $49,000 per year or less – would need to pay more than 25 per cent of their pre-tax income for any advertised rental, data company Proptrack said. It defines affordable rent as accounting for less than 25 per cent of a household’s pre-tax income.