TOP STORY: Familes battle as rents spiral

House rentals in the city are stretching family budgets after rising as much as 22 per cent to record highs in the past year.
Property managers and budget advisers are becoming concerned that too many tenants are paying more than half their income in rent.
Families on lower incomes are struggling to afford a tidy three-bedroom house - now commanding more than $250 a week in rent - and are having to take smaller three or two-bedroom flats instead.
"I hope landlords don't keep popping up the prices. There are not a lot of high earners around and people have to be housed and have a living," said Raewyn Miller, a property manager with Eves Rental at Mount Maunganui.
Marjorie Spicer, of the Tauranga Budget Advisory Service, said nearly all her clients were feeling the pinch over higher rents.
Steve Warburton, principal of Prime Rentals, said in many cases tenants could not sustain paying half of their income in rent - "maybe that's one of the reasons that 20 per cent of the people who arrive in the region also end up moving away."
Incomes in Tauranga have not matched the increase in rental prices, he said.
"Tauranga is in a bit of a Catch 22 with wages relatively low compared with other regions. Unless there are changes in employment or wages I can't see any reasons for rents to increase greatly over the next couple of years," said Mr Warburton.
Rising property values, however, have pushed up weekly rentals between 8-11 per cent and, in some cases by as much as 22 per cent, in the past year.
Prices now appear to be levelling out.
According to national tenancy figures, the median rental price for three-bedroom houses across the city rose 8 per cent.
In Tauranga central, Greerton and Welcome Bay (Te Papa) the weekly rent rose from $230 at the end of 2003, to $250 in December last year.
At Bethlehem, Otumoetai and Judea, the median rent rose from $240 to $260 a week and in higher-priced Mount Maunganui and Papamoa, rents increased from $250 to $270 a week.
Rents for two-bedroom houses - a popular target for tenants - increased 10 per cent from $200 to $220 a week in all three areas surveyed.
A three-bedroom flat in Te Papa rose 11 per cent from $225 to $250 a week, while a new two-bedroom apartment generated a 15 per cent price rise, from $200 to $230 a week.
A three-bedroom flat in north west Tauranga had a similar 15 per cent rise, from $200 to $230 a week, while a one bedroom unit had the single biggest increase of 22 per cent, from $135 to $165 a week.
Mr Warburton said there was a big demand for rental properties in the $180 to $240 a week bracket - but in Tauranga people were reluctant to take on rentals worth over $270 a week.
"Some people who have moved from Massey, Henderson and South Auckland have told me they are having to pay the same rental prices, yet they are earning less money."
He said there was a good supply of rental properties but the ones under $270 a week were soon snapped up.
"People are very price conscious - and families are looking around for the best possible value based on their income," said Mr Warburton. "Tenants are living on the edge because too many are paying half their income in rent - it's a boom or bust situation."
Property manager Raewyn Miller said not many people could afford weekly rents over $300 at the Mount and Papamoa.
The average rent on the coastal strip was between $280 and $300 week, though rentals in the prime waterfront location of Marine Parade have hit $450 a week.
She predicted if landlords kept putting up the rent, many tenants would only stay until they found something cheaper.
"If you keep the rent down then you keep your tenant."
Mrs Spicer said the Government had recognised that housing had become more expensive and had increased the amount of accommodation supplement or special benefits to cater for the increased rents.
She said a lower income earner can apply to Winz for accommodation costs. "The trouble is he or she is then hooked into the social welfare system and becomes accountable."