Some Bay of Plenty families are being forced to live in overcrowded conditions as rental prices continue to rise.

Latest Trade Me figures show rents are holding firm at an average of $475 a week which makes Tauranga the third most expensive city to rent - behind Auckland and Wellington.

Head of Trade Me, property, Nigel Jefferies, said rents were up more than 9 per cent year-on-year, and online activity suggested Tauranga remained popular with buyers and renters from Auckland.

''The growth in Tauranga's rents suggests that supply is not meeting the demand which is driving prices.''


Tauranga Rentals' Dan Lusby said demand for properties had slowed in the past month.

However, the supply of rentals was limited, and recently multi-generational family groups were banding together to look for accommodation.

"We are getting grandparents with a daughter, maybe a partner and grandchild/grandchildren looking for bigger houses - three or four bedrooms," Mr Lusby said.

That often bought risks of overcrowding - half a dozen cars parked outside, up to six adults using one bathroom.

"We do keep an eye on that," he said.

Five-bedroom houses were hard to find, and bonds were getting up over $2000.

"Bonds shouldn't be a problem because they can be transferred from one property to another. Seldom does a tenant have to find the bond from scratch," Mr Lusby said.

Landowners were becoming "a bit more realistic" about allowing tenants to have pets, he said.


Up to a third of houses in Tauranga were rentals, and that's the country-wide average, said Mr Lusby.

Rentals BOP's Gary Prentice says: "The market has levelled off but lacks long-term rentals for families.

"There are short-term rentals if people are prepared to move out at Christmas when the owners want to stay for six weeks or so."

The market had been unusual for 18 months, he said, with many rental property owners selling up when prices were high. Consequently, there were fewer places to rent.

Weekly rents also rose beyond what families could afford, so it was not surprising that things slowed down, he said.

Tauranga's Budget Advisory Service manager, Diane Bruin, said families were finding it difficult to come up with a bond but "depending on income levels Work and Income may be able to assist families".

"If people have rented before then the bond can be transferred to the next property.

"If there is damage to the property, this comes off the amount held, and they will have to find the balance difference."