By Emma Thelwell, ninemsn Money

Rents are set to soar by as much as 11 percent this year, as landlords seek to cover rising costs amid a strengthening economy.

Last year, tenants cashed in as rental growth wallowed at its lowest annual rate since 2002.

However, rising interest rates and land taxes, coupled with a brighter economic outlook and an ongoing lack of supply in the housing market will see landlords push up their prices this year, economists have warned.

Landlords in Sydney are likely to slug tenants with at least double last year|s increase, pushing up rents by up to 4.4 percent this year.

"Sydney rents are likely to increase by at least double the 2009 rate of 2.2 percent to approach the $500 per week level for houses," Matthew Bell, an economist at Australian Property Montiors said.

Meanwhile, Melbourne rents are expected to resume long-term upward trends, rising by up to 7 percent.

However, tenants in Perth and Brisbane face the largest increases, Mr Bell warned, as the property markets in both cities play catch up with Sydney and Melbourne.

In Perth, average house rents could rise by up to 11 percent - to as much as $400 a week.

While Brisbane rents are expected to rise by around 8 percent, also approaching the $400 a week mark.

The increase will see as much as $40 a week, or $160 a month, added to tentants| rent payments.

As the job market improves, tenants will be "more willing and able" to shoulder the rising costs, Mr Bell said, with many less likely to buy now that the First Home Owner Boost has finished.

With new builds unable to keep up with the rampant growth in population, there simply are not enough new properties to meet the demand, Mr Bell added.

"Increased costs for landlords in the form of rising interest rates and rising land taxes due to increasing land values, should mean that asking rents will start to increase steadily throughout 2010", he said.

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