Rents soar $60

By Allison Hess


The cost of renting in the Western Bay has increased on average by $60 a week in the last year and demand is not easing, with one property attracting 245 applications in an hour.

New Trade Me figures also showed rental listings for Tauranga had increased 27 per cent year on year in April, but real estate agents said this provided little relief for those looking for affordable rentals. The Western Bay had 28 per cent more listings.

On average, Tauranga rental prices had gone from $380 per week last April to $440 per week this April, and the largest increase occurred with apartment rentals, which went from $380 to $475.

Alistair Helm, head of product at Trade Me Property, said the figures highlighted just how dynamic the Bay economy was at the moment.

Usually an increase in listings created an oversupply of houses and brought prices down, but that was not the case in Tauranga, he said.

He believed the demand from people wanting to move to or invest in the Bay had outstripped supply so was continuing to force prices up.

"I think the overall Tauranga market has seen the overspill from Auckland which we've called this halo effect," he said. "The Bay of Plenty is a really attractive place for Aucklanders."

The geography, topography and growing economy were attractive to those looking beyond Auckland, he said.

Mr Helm said rental prices were continuing to go up in line with sale prices as investors tried to make a decent yield.

While figures showed the rent for apartments had shot up by $95 a week, Mr Helm said caution was needed because the market for apartments was relatively small in the Bay so figures could be easily influenced by anomalies.

"I think apartments are popular in Tauranga and the Mount as well. There is a demand because there is a demographic element - older people often like moving to apartments for the lifestyle."

Eves and Bayleys Real Estate chief executive Ross Stanway said there were more rental listings coming into the pool, which was heading in the right direction.

"Tenants having difficulty getting a property might not see that as significant because they have not managed to secure a property, so they will still be feeling that there aren't that many out there," Mr Stanway said.

The highest volume of demand was for properties less than $400 per week, he said. "If you moved up to the $450 to $500 per week, there is much less of a supply issue."

Tauranga Rentals owner Dan Lusby said there were listings available but only at the higher amounts. He said those stuck in the housing crisis were in the lower socio-economic group and there were not enough cheaper-priced properties for them.

"What's happening is the ones that can afford a little more are paying a little more for those lower-quality rental houses. Those cheap houses have become too dear now."

It was rental houses over $500 that people really struggled to afford.

"Today I looked at the listings and only two are under $400 per week.

"Just this week we listed a new property in the Avenues and within an hour we had 245 applications for it. It was a two-bedroom for $350 a week.

"Everyone flows into it and that's where we've got to weed out a lot of applicants, because we're not going to put a family with five kids into a two-bedroom house."

He said rental prices would have to come back down eventually because "if the owners expect too much, they won't rent them out".

Rentals BOP manager Gary Prentice said in his experience the rental situation in terms of properties becoming available had not eased much, although a few more had been trickling in: "But they are certainly up in price to what they were [last April]."

He said properties were sitting a little longer because there were not many people who could afford the rents that were being asked.

"[Late $400 to mid $500 per week] is a lot of money out of a person's budget, especially in a family-type situation. It's different if you're looking at having three or four flatmates all earning their own incomes."

A Bay of Plenty Times post on Facebook asked locals what they were having to give up to afford rent, and it generated a flood of replies.

"Food, going out, new clothes ..." one responder said.

"Cheaper groceries/meals, my membership to boot camp, kids' sports activities, unable to save, unable to visit elderly parents in UK ... budgeting each dollar and I work fulltime," another commented.

Coffee and Netflix sacrificed to pay for rising cost of rent

Getting flatmates and cutting out coffee and Netflix are measures 23-year-old Hollie Procter has been forced to take to be able to afford to pay the rent.

Miss Procter, who works as a content creator and photographer, moved to Katikati about a year ago because rents were cheaper.

Since then, the rent for her two-bedroom home has gone up $50 a week to $350. To pay for the increase she has had to cut out non-essential expenses like going out for dinner and recently downloaded a budgeting app which "has changed my life".

"I don't have Netflix any more. I can't have my daily coffee."

Miss Procter says cutting out those non-essentials is the only way she can afford to keep paying the rent.

"It literally is just living and working," she said.

As a result of this, Miss Procter is moving to Bayfair next week to cut down on the cost of petrol.

She will be paying $380 a week for the two-bedroom house so has had to "sacrifice" living on her own.

As well as having her boyfriend move in, she is looking for another couple to help cover the cost of the rent and bills.

- Bay of Plenty Times

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