Families are reportedly sleeping on couches and living in over-crowded homes with friends and relatives as Whanganui endures its worst rental housing crisis in at least 20 years.

Two leading real estate companies say people are desperate for accommodation with up to 40 at a time vying for a single rental.

The Salvation Army has a contract to provide emergency housing but can't find any properties to rent.

Philip Kubiak, Branch Manager of Property Brokers in Whanganui stops short of calling the situation a crisis but says he has not seen scarcity at the current level in his 18 years in the real estate industry.

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"If you go back a year or two Property Brokers would have had 35-40 properties on our books for rent. As of last week we had four," Mr Kubiak said.

Sue Ellis from Harcourts Whanganui said people were "screaming out" for accommodation but there was a shortage of good rental properties and this was increasing the price landlords were asking for rent.

"A two-bedroom unit that rented out for $180 per week a year ago is now attracting rents of around $230 per week," Ms Ellis said.

Major Glenn Anderson of the Salvation Army described the situation as "dire" and cited the case of a man whose rent has increased by $30 per week.

"He's gone from $160 to $190 for a dump. I've said he should appeal through the tenancy tribunal because I think that's taking the mick quite frankly," Mr Anderson said.

"When there's a scarcity of housing unscrupulous landlords can put the pressure on by saying to their tenants, which they do, 'well if you don't like it move,' knowing there's nowhere to go. So you just accept it. That's happening a bit."

An article by Wanganui Chronicle columnist Kate Stewart detailing her own harrowing experience finding a place to rent attracted a large number of responses on social media.

One person cited the case of a couple with five children living in a three-bedroom home with six other people because they can not find a home to rent. Others shared similar examples.

Whanganui District Council reports its pensioner housing is full after years of having vacant houses available.

Mr Kubiak said the problem was caused by a decrease in available rental housing which he put down, in part, to more first home buyers, many of whom were new to Whanganui.

"A lot of rental properties have been snapped up by first home buyers. So the supply goes down," Mr Kubiak said. "We've got a lot of out-of-towners moving into Whanganui - generally buying their own properties."

Because of the sheer numbers of prospective tenants rental agencies were having to run viewings with up to 40 people at a time attending.

"I've not seen it this busy before. Maybe in 2003, 2004, 2005 the market was very hot. I've not seen scarcity at this level before in my time," Mr Kubiak said.

"It's been a hot real estate market in terms of sales over the last couple of years - especially in Whanganui."

Ms Ellis said the city was also attracting housing investors from the likes of Auckland, Wellington and Christchurch and that was forcing up house prices.

But she also saw positives.

"This is good news for Whanganui. It starts to eliminate the unloved properties - there are still far too many of those around," Ms Ellis said.

"People want good properties, with heating, insulation and fire alarmed."

Mr Anderson said real estate agencies are telling him it's as dire as they have ever seen it.

"We are in the process of setting up seven emergency houses and are doing interviews this week for a social housing worker. But we're in the same market as others trying to identify rentals and they're just not there.

"We're in the precarious position of setting up emergency housing and employing staff but we've got no properties."

He said he was aware of families living with family, friends or acquaintances, "just wherever they can find", and often in crowded and less than ideal situations.

"It's dire. I've been here five years and it's the most pressured market in that time."

Mr Anderson blamed Government attempts to take the heat out of the housing market in Auckland and Christchurch.

"There wasn't a problem in the Gisbornes and the Whanganuis and the Invercargills in terms of the investment market.

"And with the Government reducing their social housing stock in cities like ours ... then you've got a shrinking social housing market and at a time when the heat's on."

He said the type of people needing housing was mixed.

"It's displaced families. It's breakdown in relationships and often there's children involved and one has to find alternative accommodation.

"It's single men, more so than single women - at least we see more single men here. Possibly because theres greater support for women through a multiplicity of agencies but less support for men and that's a challenge.

"There's more emergency housing than ever before but it's not enough."

Mr Kubriak said people seeking rental accommodation should not give up hope. The number of available homes fluctuated from month to month.

"Our rental team had a bit of a spike last week - ten new rental properties became available - so we have 14 this week as opposed to four last week."

Mr Kubiak offered these tips to people seeking a house to rent:

Tips:

+A perfect credit history always helps
+Get on the real estate agents' books so you're first off the rank
+Don't give up - be persistent
+Good references, good testimonials
+If you're straight up and down you've got a good chance of getting the property.

Mr Anderson said, sadly, that left many people out in the cold. For them, he said, it was a crisis.