Hawke's Bay's rental accommodation shortage is starting to bite with demand well outstripping supply across the region.

In Central Hawke's Bay there are only four properties available to rent between Property Brokers and Harcourts, and yesterday there were none listed on the Trade Me website.

Harcourts CHB property manager Jacqui Hutchison said while they had 13 listings in August that had now dropped to two - one a small two-bedroom house and the other in a rural area.

"The average three-bedroom that everyone is looking for with a fire, fenced and handy to town - there's none."

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She put the situation down to a combination of houses being sold for people to live in themselves rather than rent out, and people tending not to move around between rental properties.

CHB Property Brokers property manager Sharon Donnithorne said the situation had been building up, along with an absence of inquiries from investors.

With two houses in stock and numerous clients waiting for accommodation she said it was a difficult situation.

"It's hard when you want to offer people good homes and have something for everybody.
"We suggest they ask around, check the local community noticeboards and consider living more rurally as there can be farmers' cottages available."

Yesterday there were 44 Napier rental properties advertised on the Trade Me website, and Quinovic Napier co-principal Martin Easthope said people were contacting the company every day seeking accommodation.

"We have had a few people break down in tears saying they can't find something."

He put the situation down to a lot of new people coming to the region to live, as well as landlords deciding to sell while house prices were up.

"I suspect in the long run they are going to regret that though as it's all very well to have that capital in your pocket but what do you do with it then?

"Because there is a shortage, rents have gone up and they have lost the opportunity to get a decent return."

Quinovic Hastings principal Ross Davidson said the shortage had been building up since Christmas, slowly getting tighter and tighter.

As of yesterday, there were 52 houses to rent in Hastings, but Mr Davidson said that had got as low as 38.

"I think it's a direct result of the real estate market - a lot of investment properties are being sold to homeowners."

As was the case across the country, Hawke's Bay was also affected by the fact net immigration was up, he said.

Another suggestion put forward as to why people were not buying investment properties, was the tough new lending restrictions requiring property investors to have a 40 per cent deposit.

The loan-to-value ratio (LVR) restrictions were introduced by the Reserve Bank on September 1, doubling the current deposit required for investors seeking loans to buy property in the regions.

The October 2016 ANZ Residential Property Survey results showed that nearly a third of investors (31 per cent) across the country said that the high LVR restrictions had significantly impacted their strategy over the past year.

Nearly half of those investors (14 per cent) said they hadn't bought a property that they otherwise would have bought if the restrictions weren't in place.