Landlords v renters

By Michele Hunter

Landlords are clamping down on the types of people they are prepared to rent to - with one property manager preferring to leave houses empty than rent to bad tenants.

Tauranga Property Investors Association president Dan Keller said there were fewer tenants looking for a house. More people were living at home longer, or renting a house as a group instead of getting a property on their own.

"There's not consistently high demand, which tells me that tenants are shopping around more and more and then they are in a [better] bargaining position."

Mr Keller said he preferred to leave a house empty than to rent to tenants he was not sure about.

"There's not many good tenants.

"As long as they are not desperate to find something and are organised, they definitely have the upper hand at the moment.

"A good tenant never has anything to worry about."

Trade Me Property head Brendon Skipper said the number of rental listings in Tauranga was up 15 per cent from the same time last year. This week there were 398 properties for rent, compared with 346 the same time last year.

Mr Skipper said Tauranga was "ahead of the curve" nationally - the overall number of listings has dropped 2 per cent on last year.

The average rent in Tauranga is $375 a week - a 2 per cent increase on last year when it was $368.

Mr Keller said popular suburbs included the Avenues and the downtown end of Mount Maunganui.

Areas close to the CBD were attractive as tenants could beat rising petrol prices by walking or catching the bus to work.

Rents have increased across the board in the last year to off-set increased costs to landlords. The average increase is $10-$20 a week.

"Because GST went up, all the costs like insurance went up," Mr Keller said.

"The financial crisis [has caused] the landlord to lose money on every property, because the value has dropped. They have to pass on the increase in costs, which is the normal thing to do if you are investing."

Ross Stanway, chief executive of Realty Services (Bayleys and Eves), said the rental market tended to fluctuate.

Top of the market properties which rent for $400+ per week were in hot demand, he said.

"Good quality four bedroom homes [in Tauranga and Mount Maunganui], that are well-presented and fairly priced, are just snapped up.

"There is very much demand outstripping supply [in the mid to top end bracket].

"Other properties of a lower rental value are not being so eagerly sought after."

Mr Stanway said there had been a noticeable increase of new renters who wanted to rent after selling their house.

There were plenty of good tenants competing for sought-after properties, he said.

Tauranga Harcourts franchise owner Max Martin described the current rental market as "fairly balanced".

"There's a reasonable supply and a good supply of tenants. It's just the ability of people to pay the rent."

Renters without references and a clean credit record would struggle, he said.

Tauranga property manager Helen Barnard also described a balanced market.

"We have got some good stock and good tenants. It's nothing like Auckland."

Good tenants were still being "particular" and holding out for the right property, she said.

And even houses with "the X factor" - indoor-outdoor living, heating and garages - might attract a maximum of six prospective tenants.

"Kiwis love garages. If you have got a property without a garage it's very difficult to rent. [People are looking for] something that isn't just four walls and a ceiling, they want something that has a little bit of character."

And tenancies were lasting longer, as a lack of cash forces people to stay put.

"A lot of people don't move as much because of the economy," Ms Barnard said.

"People are having far longer tenancies. A few years ago people jumped around a lot more."

Tauranga Rentals principal Dan Lusby agreed.

"It costs tenants a lot of money to move around. Because of the economy they have been staying put, and will move if they have to move."

That had contributed to the lowest level of properties available "for a while", he said.

But demand was low too, although Mr Lusby believed it was picking up.

Realty Focus Ray White property manager Mary Dods said there was a good stock of properties available but prospective tenants who turned up at a viewing looking scruffy and with no references "haven't got a hope" of securing a property.

"Most of the landlords require references and we do credit checks," Ms Dods said. "There's a lot of people out there looking for good properties."

Ms Dods said three bedroom homes with garages were always popular.

And there was always a shortage of properties available at the downtown end of Mount Maunganui.

"From Golf Rd up you can never get enough. We probably have, in a sense, got a shortage of property there in that sort of area. Everywhere else we have got relatively good stock at the moment."

Other popular areas included Tuihana and the Tahatai Coast School zone in Papamoa, she said.

Rent reviews were conducted annually and rents in Tauranga had increased in the last year.

A typical three bedroom house in Mount Maunganui rents for $20-30 more than this time last year.

It was a case of supply and demand, Ms Dods said "especially in areas right up here at the Mount you know the property is going to rent really well".


A three bedroom house in Mount Maunganui goes for anything between $320 and $500 a week. The Department of Building and Housing says the average is $347.

Three bedroom homes in the Avenues are available to rent for $310-$600 a week on Trade Me. The Department of Building and Housing says the average in Tauranga central is $306.

Rents in Tauranga have increased an average of $10-$20 in the last year.

The average three-bedroom house in New Zealand rents for $333 a week.

Average rents across New Zealand increased by 2.5 per cent in the year to January.

- Bay of Plenty Times

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