The number of rental properties has nose-dived in Tauranga. Photo / File
The number of rental properties has nose-dived in Tauranga. Photo / File
The number of Tauranga rental properties available to let last year plummeted by nearly 30 per cent while rents reached another record.
One property manager says the situation was a ''crisis'' and it was not unusual for more than 100 people to show up at a viewing.
The latest figuresfrom Trade Me show the median weekly rent in Tauranga was $620 last month, a jump of $70 a week or 13 per cent compared to December 2020.
The supply of rental properties across the city also dropped by nearly 30 per cent in 12 months while demand increased by 11 per cent year-on-year.
Gavin Lloyd, Trade Me's property sales director, said the lack of supply and sizeable rent increases throughout the last quarter of 2021 would be a "bitter pill" for renters to swallow.
Harcourts Tauranga managing director Nigel Martin. Photo / NZME
Harcourts Tauranga managing director Nigel Martin said it was not unusual for more than 100 people to turn up wanting to view the same property.
There was a lot of residential development happening around the town in Tauranga and hopefully, that would eventually take the pressure off the rental market, he said.
Demand and supply were under considerable pressure.
"That's partly due to fewer rental properties being available and people deciding to stay on longer. Lots of tenants are on fixed-term contracts and locked in for 12 months.
''At the end of day fixed-term tenancies gives the landlord some comfort and assurance and it also gives the tenant some peace of mind about having a place to call home."
Tauranga Rentals owner Dan Lusby. Photo / NZME
Tauranga Rentals owner Dan Lusby said Tauranga's rental market was in "crisis" and he was getting between 50 to 100 people vying to rent the same property.
"Every time we advertise for tenants we get a more than a 10 per cent increase in the number of applicants compared to the same time last year."
Seasonal workers were also looking for accommodation.
"We have also got an increase in kiwifruit workers and avocado orchard workers needing to be housed and that's also adding more and more demand for our housing stock.
"The increase in the rate of inflation, tax changes and rising compliance costs meant some property owners and investors opted to exit the market.
"Every time we get a new tenant, we also have to totally comply with the new government regulations within three months."
But there were lengthy delays in getting materials to do repairs and renovations.
"I have a rental property in Brookfield where the kitchen and bathroom needs a do-up but the builder doing the work says it will take 27 weeks to get some gib board.
"Meanwhile, this property has been empty for months."
Realty Group Ltd managing director Simon Anderson. Photo / NZME
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson, said there was certainly extra pressure being placed on Tauranga and Rotorua's rental markets over the past 12 months.
"There has been very strong demand in both Rotorua and Tauranga for rental properties in the previous 12 months to two years," he said.
Anderson said some of the shortage in supply was because some landlords had sold up due to rising costs and tax changes, and there were new investors entering the market.
"Any increase in rent for tenants is going to be difficult and I feel for them, but increasing costs for landlords means extra cash out of their pockets as well.
Anderson said it was a real balancing act between landlords and tenants needs.
"The real estate market is the market and anyone who owns a rental or investment property obviously wants a return."
"I think this year we're likely to see a bit of flattening out in the demand for properties with more steady sustainable capital growth, and more rental properties becoming available.
However, Anderson said that depended on the supply chain which was slowing down the speed of new builds and renovations. It was taking up to 30 weeks for builders to get gib board.
A 23-year-old Pāpāmoa shop assistant, who asked not to be named, said he and his three former flatmates had been searching for months for a three or four-bedroom house.
He said they had previously rented a house in Pāpāmoa for $650 a week but had to move out in mid-October because their former landlord decided to sell the property.
The shop assistant said he was currently living with his parents and he and his friends had applied to rent at least 30 properties without success.
"It's a real struggle, we've searched everywhere. Ideally, we would like something in Pāpāmoa or Welcome Bay because of the distance to work, but we're looking everywhere.
"I think because we are a bunch of single twenty-year-olds, some landlords believe we will party all the time and may trash the place, which is just not us at all.
"We have good references and even our former property manager has been trying to help us find a place. It's quite disheartening getting knocked back so often.
The most popular rental in Tauranga on Trade Me last month was a two-bedroom apartment in Mount Maunganui with a weekly rent of $425, and there were 93 enquiries within two days.
Tauranga Property Investigation Association president Juli Tolley said the rental market in Tauranga is still under "heavy demand and there were numerous factors contributing to each side of the equation.
"More people are moving to the area for jobs and schooling and fewer people are moving away, especially youth, and they branch out from their families to move in with a partner or friends," she said.
