Why are the prices of home rentals still rising?

A lot of property investors are getting hit with higher prices.

In some areas, the increases are staggering.

Reporter: The number of rental properties in the Greater Sydney area has risen by 30 per cent in three years.

A large number of these properties are located in inner-city areas and inner-urban suburbs.

That means a lot of the rental property owners are getting caught in a catch-22, they’re either paying higher prices to stay in their properties or they’re not getting any returns on their investment.

In many cases, they’ve got a rental property that’s not worth the money.

But there are other options for property investors in NSW and Victoria.

Property manager Simon McBride says the increase is the result of the current economic climate.

Simon McBride with Property Management Australia says it is a reflection of the fact that people are being priced out of the market.

Simon McGarry: It’s been a really challenging year, but I think people are still finding that the value of their home is still really strong and the opportunity to live in a really nice place. Reporter