Editorial: Rent hikes leave many sectors struggling

There is nothing easy about being a landlord either, says Dylan Thorne. Photo / File

It's not hard to see why many young people are struggling to save a deposit for their first home.

This week the Bay of Plenty Times reported Tauranga rents increased 9.7 per cent - a bigger hike than Auckland, Waikato and Wellington, according to new figures from TradeMe.

The average median rent jumped from $360 in May 2014 to $395 in May this year.

House values are also increasing. QV's May residential price movement index showed Tauranga average home values increased 6.7 per cent year-on-year to $480,727.

This means prospective home buyers need to be able to save more than $95,000 to achieve a 20 per cent deposit. Pretty tough going for a young family, say, paying around $395 a week in rent.

It's not just first-home buyers who are being hit.

Bay social agencies say people are going without meat, slashing their food bills and not heating their homes to combat soaring rents in the city.

Others have ended up homeless or resorted to living with friends in garages.

Merivale Community Incorporated general manager Rachel Palmer said it had noticed an increase in people moving out of rental properties due to high rents and then struggling to find another rental they can afford.

She knows of six families in Merivale that are homeless and of people living in cars and garages.

The trend is also putting pressure on elderly tenants on a fixed income and more are seeking help from the Tauranga Budget Advisory Service.

Some were cutting back on the amount of meat they ate while others were cutting back on heating because they could no longer afford to pay both their power bills and their rent.

It is concerning that rising living costs are having such a big impact on so many sectors of our community - the young, the old and those on low incomes.

However, we do live in a free market and landlords are running their investments as a business and are entitled to make a profit.

And there is nothing easy about being a landlord.

They have to deal with some tenants who fail to pay their rent, get behind in their rent payments or cause damage their investment property.

Tauranga Property Investors Association president Grant Harris says the lack of supply and high demand was pushing rents higher.

He also points out that while it is reasonable to charge the market rate some landlords chose not to in an effort to retain a good tenant, which when you consider the potential fallout associated with having a bad tenant, seems wise.

At heart this issue is one of supply and demand.

More homes are needed if the costs associated with housing are to be reduced.

City developers have made this point in the past, saying that until the Resource Management Act, the Building Act and the council fee structure against land developers and builders are addressed, the region cannot truly tackle the cost of housing.

What do you think?
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