The Rotorua rental market is a ''ticking time bomb'' and there was an absolute housing crisis in the city, real estate agents say.
Meanwhile, a social agency says it is dealing with people being forced into homelessness due to rocketing rents while others were going without food and paying down rent arrears with money borrowed from third tier lenders.
Data from the Ministry of Business Innovation and Employment showed the average median rents in the Bay of Plenty in the year to November jumped from $381 a week to $445.
MP for Bay of Plenty Todd Muller said the amount in extra rent Bay families were paying was not inconsequential.
''It could fill up a car around 30 times, fly a family of four return to Australia, or pay for about 11 big grocery shops," he said.
TradeMe figures showed a three-bedroom house on Monokia St in Fairy Springs had 225 enquiries during its first two days on site, TradeMe property spokesman Aaron Clancy said.
Clancy said the average median rent in Rotorua had climbed 18.9 per cent or to $440 in the year to November and ''it's not showing any signs of dipping in the near future''.
Tremains Real Estate Rotorua manager Malcolm Forsyth said the number of landlords selling up combined with huge property values and rising rents had created a ''ticking time bomb''.
Rising rents and rental shortage makes for tough times
''A significant number of landlords are realising that gain and selling up," he said.
"So when they sell there is a percentage of those properties going to investors but you have a percentage of those properties going to first home buyers which is great.''
But Forsyth said that meant the number of rentals was diminishing.
Forsyth said you would be lucky to find any rental for under $400 a week, while an average three-bedroom house was likely to fetch well into the $400 price bracket and it was not unusual for 25 to 30 people to show up at one viewing.
''I am fearful of where it is all heading.''
He said he knew of investors who were waiting in the wings to build new houses but had faced ''obstacle after obstacle'' from the council.
''So we have got some solutions, but we just get problem after problem. Then you have the demand completely exceeding the supply driving up prices which is just fuelling the whole situation.''
Simon Anderson, managing director of Realty Group, which operates Eves and Bayleys, said there was an ''absolute housing crisis'' in Rotorua.
He said the lack of any new developments in the city ''because they are unable to get off the ground'' was another factor alongside more people buying houses from outside the region.
''That is putting more and more pressure on the population growth," he said.
"So what you are seeing some really good stuff happening around business growth and activity but that is not being supported by the housing availability stock and I can't see that changing in the short-term.''
''It is a major issue the council needs to face up to and find a solution that works.''
Salvation Army Rotorua corps officer Kylie Overbye said more people were unable to pay for food and other essentials because rents were taking up a large proportion of their incomes.
''We are also noticing there are a lot more people unable to pay their rents. This leads to other issues, as they get into arrears, and sometimes borrow money from third tier lenders who charge high interest rates, to cover costs.
''Affordable housing is in short supply, and landlords often shy away from considering beneficiaries as tenants. Large families are sometimes split up if there is only a small home available.''
''Others become homeless, some move into emergency accommodation, while some families move into overcrowded situations.''
Rotorua Lakes Council acting chief executive Craig Tiriana said the council was extremely motivated to address Rotorua's housing shortage.
''Work on the development of a district housing plan is progressing well with the support of, and alongside, key central government agencies, iwi, landowners and developers, and others who will have a role to play," he said.
Details will be announced in the New Year.
Council teams work hard to try and ensure the process was timely and, like many, it was keen to see residential development happening as quickly as possible.
''We acknowledge some people may consider some development requirements to be unnecessary 'red tape'," Tiriana said.
"However, both the council and developers had a responsibility to meet legislated requirements designed specifically to ensure the safety of people who will reside in a development and those living in surrounding areas, and to protect property and the environment from known risks.''
This was particularly important as climate change and more regular storm events place additional pressure on the city's stormwater system, as one example, he said.