Greens MP Jenny Leong has called on the state government to step in to curb surging rents in Sydney.

The member for Newtown said she was troubled by new data showing that the Sydney median house rent had increased 3.9 per cent over the past year – the steepest jump in five years.

"The NSW government seemingly has no idea what to do when it comes to escalating rents, particularly in Sydney," Ms Leong said.

"This crisis isn't going away, and we need to be starting to take steps towards addressing it."

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The increase in house rents occurred despite a record number of investors buying property and adding to the supply of rentals.

"I think it's a real concern," she said.

"And somehow the blame is being shifted to first-home owners, when really what we've seen is successive NSW governments failing to act when it comes to housing affordability."

The median Sydney house rent is now $530 a week and apartment rents are sitting at $500 a week, according to figures from the Domain Group.

Rental prices is Sydney have now gone from the ludicrous to absurd," Ms Leong said.

In coming months Ms Leong will launch a campaign ahead of putting a bill to parliament to reform tenancy laws.

That bill, she said, would limit rent increases to once a year, and cap rent increases in line with the Consumer Price Index. CPI is currently 2-3 per cent a year.

A similar system was introduced in Berlin last month to put a halt on the city's rents, which had increased by more than 9 per cent in a single year.

"The Berlin justice minister said that rental properties are more than just a commodity, they're actually people's homes ... and I would totally agree," said Ms Leong

"We need to be looking at how we handle the affordability of housing and provide some security to renters, and putting some caps on rent around CPI is one option for that," she said.

NSW Tenants Union senior policy adviser Ned Cutcher​ was supportive of the proposal to cap rents.

"There should be limits on how frequently rents can be increased, and limits on how much," he said.

Mr Cutcher also said the onus should be on the landlord, not the tenant, to show that a weekly rental rate was in line with market value.

But Real Estate Institute of NSW president Malcolm Gunning was critical of Ms Leong's suggestion and said tying rent increases to the CPI would actually hurt tenants in the long run.

Mr Gunning said the supply of rentals would start to outstrip demand in the next 12 months, and capping rent prices would take away the opportunity for tenants to negotiate their rent.

"What they're proposing in a few years' time will bite them in the arse," he said.

"Rent control has never worked in the past; it won't work again."

Mr Cutcher agreed that tying rent increases to the CPI wasn't a perfect solution, but should be tried anyway.

"I guess that's the risk that you run," he said.

"It's tough, but clearly the status quo in Sydney is also tough."