The ABS data also revealed that the ACT recorded the country's second highest increase in house prices about 60 per cent over the three years from 2003-04 to 2006-07.

Perth recorded the biggest rise, at 93 per cent.

The rising cost of housing and living means that, in effect, Canberrans experienced real wage growth of only 3.5 per cent between 2001 and 2006 even though incomes grew by more than 30 per cent.

But the increase in wages after cost-of-living expenses still exceeded rises in Sydney and Melbourne about 1.5 per cent in each city.

According to NATSEM data, families were also squeezed by rises in fuel, food, education and child-care costs.

NATSEM's principal research fellow Robert Tanton said the research report revealed the existence of ''two Australias'' mining and non-mining regions.

He said Canberra usually performed well in surveys much as mining regions did because of its demographic base.

''We always find that the ACT does fairly well. A lot of that is because the ACT population tends to be higher educated and in more management-type jobs, so you will tend to get those higher income increases,'' he said.

The manager of Uniting Care Kippax in Belconnen, Gordon Ramsay, said that despite income rises families on mid-range incomes were doing it tough.

He said his organisation had observed a sharp rise in people seeking relief from ballooning housing and cost-of-living expenses.

He estimated that his organisation had given away between $5000 and $6000 worth of clothing in recent weeks as part of winter relief efforts.

''People are finding it difficult to buy warm clothes because they are spending all their money on food and housing,'' he said.

Bec Hoogesteger, 29, lives in Higgins with her husband Chris, 30, and children Lucy, 7, Sam, 3, and Jackson, 2.

Her family had made big sacrifices to meet mortgage payments on their first home. She had left work when children had arrived and prices had continued to rise, the severest increases occurring in the past year.

''The mortgage always comes out first, we have always made sure of that. It was more of a problem with groceries: we got to a stage where we couldn't do a full grocery shop,'' she said.

Mrs Hoogesteger said her family had adapted to rising prices by drawing up a new family budget.

''We are doing as much as we can to combat the cost of living. The cost of groceries has really gone up, so we have started shopping at Aldi and halved our grocery bill.

''I have started meal planning , which makes a big difference. I am baking bread, which saves money, and I don't buy extras.''