Rents in regional markets are growing faster than in capital cities and this could be due to several factors, according to the latest report from CoreLogic.

Over the year to April, rent values in regional markets rose by 9.6%, higher than the 3.3% gain recorded in capital cities.

CoreLogic's latest report, which monitored major sub-state regions across Australia, also showed a decline in the total rental listings. Furthermore, the average time for a rental property to be occupied shrank from 25 days to 17 days in April.

Eliza Owen, head of residential research at CoreLogic, said one major factor driving the rapid rent increase was the slowdown in the movement of people from regional markets.

Figures from the Australian Bureau of Statistics show that migration away from regional areas to capital cities fell by 4% from the average.

"The fall in internal migration may have resulted from work or study plans in the city being disrupted by COVID-19," Owen said.

This is in stark contrast to the growth in the movement of people from cities to regional areas. During the last quarter of the year, migration to regional areas surged.

"Regional relocation from cities to regions may also be increasingly skewed to higher-income workers, which would put further upward pressure on purchase and rent prices," Owen said. "This is because remote work tends to be concentrated in the ‘knowledge economy’, such as for professionals, as well as clerical and administrative workers."

The growth in property values was also considered a substantial factor in the increase in rental values. Potential owner-occupiers being priced out would add demand to the already tightening rental market.

Owen said establishing more affordable housing in both regional Australia, and major cities, could ease rental conditions.

"The challenge with supply-side solutions is that are relatively inelastic in responding to very tight rental markets, especially in regional markets where the pool of labour and materials is often shallower relative to the capitals. But in an environment where government schemes have brought forward demand for private housing, social and affordable housing may also be an important source of activity for the housing construction sector," she said.