Demand for properties may mean rise in rents

Tenants often move in winter because they were wanting to get out of poorly heated or insulated properties. Photo / File

Hawke's Bay rents may soon be on the rise, a property expert says.

Trade Me's May property index showed the median price of a Hawke's Bay rental property was unchanged from a year ago, at $310 a week.

The median weekly rent of five or more bedroom properties increased from $315 to $523 year-on-year, while one to two bedroom properties' rent increased from $250 to $260. The rent of three to four bedroom properties remained the same at $340.

However, Quinovic Hastings principal Ross Davidson said very small and gradual rent rises may soon change.

"If rents have gone up, they've mostly gone up by about $10 a week," he said. "That's across the board with all property types. But there's a shortage of properties so that may cause rents to go up more."

Rising house prices would also affect rental prices, he said.

"If we get the ripple effect of house prices from Auckland that's talked about, that will cause rents to go up as well."

Tenants mostly moved in winter because they were wanting to get out of poorly heated or insulated properties, he said.

"Normally we're quiet in winter but this winter we've been getting quite a few enquiries from tenants. Warm and dry properties are in high demand. Cold and damp properties are discarded."

Most landlords "acted responsibly" and insulated and heated homes, he said, and he didn't see much point in enforced standards being talked about by community groups and politicians.

"I don't think there'd be much point in a rental 'warrant of fitness' because most landlords meet requirements anyway and the cost would fall back on tenants."

Month-on-month, the national median weekly rent remained unchanged at $420, a record high first reached in January this year.

This was a 6.3 per cent increase on May 2014, however.

Head of Trade Me Property Nigel Jeffries said it was the weakest month for median rent prices in 2015 - "but that's not to say it's cheap".

"It's also worth remembering that over the past five years the median weekly rent across New Zealand has risen 23 per cent from $340 to $420 and that's much, much faster than household inflation," he said.

Only eight of the 15 regions reported increases in median rent. In the first four months of the year, at least 11 regions reported an increase in median rent each month.

Bay of Plenty stood out with an 11.4 per cent increase - the largest of any region and the only double-digit lift.

Meanwhile, the weakest regions were Gisborne (down 9.2 per cent compared to a year ago), closely followed by Otago (down 6.3 per cent) and the West Coast (down 5.7 per cent).