Rent rises add extra $6000 to annual rent bills

Steve Warburton from Prime Rentals with a stack of application forms. Photo/File

Average weekly rents in the Western Bay of Plenty have increased a whopping 37.5 per cent in two years - adding an extra $6240 a year on to average rent bills.

The data, released by Trade Me, shows that rents in the Western Bay rose from a weekly average of $320 in February 2015 to $440 last month.

This means renters in the Western Bay are now paying an average of $22,880 a year, up from the $16,640 average they would have been paying in 2015.

Tauranga also had a large increase, although not at the same scale as Western Bay.

Rents in Tauranga rose from $370 a week in February 2015 to $450 a week last month, up 21.6 per cent - and only $10 more than the average weekly Western Bay rental price.

The rent increases were hitting people with low incomes hard, said Diane Bruin of Tauranga Budget Advisory Service.

"Western Bay clients are definitely seeing an increase. Previously, people were encouraged to go to Te Puke to get cheaper rentals, and now they've increased, and houses have sold as well.

"It's a vicious triangle."

The service had an office based in the Te Puke Foodbank building, and Mrs Bruin said foodbank users had increased noticeably too.

For Holly McLachlan, competing against older house hunters has meant she and her partner have been couch surfing for four months.

The 22-year-old and her 30-year-old partner had a 7-year-old Staffordshire terrier who "doesn't do anything except sleep all day" and said their loved pet, as well as their ages, were being held against them.

"We do look younger, and they [landlords] think we're just those young teenagers that party and ruin houses. We're not those types of people. We're looking for a family house."

Dan Lusby of Tauranga Rentals said as Tauranga's prices continued to rise, more people were moving to the outer suburbs and townships, which was driving those prices up.

Often, these people were finding that when petrol and commuting time was factored in, living in the country was not much cheaper.

In both Tauranga and the Western Bay, Mr Lusby said he was having no trouble renting out properties even with the increases.

"There are Aucklanders and out-of-towners used to paying that kind of rent."

Mr Lusby said a lot more new properties were coming on to the market, particularly in The Lakes and Papamoa.

"There are a lot of investors from the Big Smoke buying them and getting us to look after them until they are ready to move here. They aren't quite ready to move to Tauranga and retire and still want a foot in the door."

Steve Warburton of Prime Rentals said for good tenants it was reasonably easy to find a house but even so, as prices grew, it was stretching finances more. It was no surprise to him that Western Bay prices were now almost on par with Tauranga.

Mr Warburton said tenants were sticking around in their rental properties for longer and the good ones were often getting below market rents as a result.

Simon Anderson, chief executive of Realty Services, which operates Bayleys and Eves Realty, said there was a genuine shortage of rental properties, especially in outlying areas such as Katikati and Te Puke.

"Quite a lot of new people [are] arriving into those areas, as we have witnessed in Tauranga as well. For some time, owners have been seeing their property values lift, and they want to increase their rents to protect their yield. That's what we're seeing in these provincial towns."