Napier rent rises among top in NZ

ROGER MORONEY
NAPIER is one of three cities in which tenants have faced the highest rent rises, with a nationwide survey showing rents are up over 7 per cent since this time last year. The average rental is now $300 a week.
And for a growing number of Napier renters the cost of living is hurting - with a rise in the number of tenants selling personal effects to stay afloat.
The Massey University survey showed the biggest rises were in Invercargill, Lower Hutt and Napier.
Professor Bob Hargreaves, of Massey University's economic and finance department, said landlords were feeling the pinch with rises in mortgages, insurance and rates.
"[Landlords] have been arguing for a while they need rental increases," he said.
Another reason for the increase was a reduction in home ownership rates, which meant there were more people wanting to rent.
Jim Brown, of Jim Brown Rentals with Property Brokers in Napier, said there had been rises over the past 12 months although he believed the Napier figures had been skewed due to the number of high-end rentals.
While landlords he represented tried to keep rises to a minimum they, too, faced rising costs: "So many basics are going up."
Mr Brown predicted further rises, which would reflect the way the country's economy was going.
One troubling factor was the increase in the number of people selling assets to cover the cost of living: "That is a terrible situation."
He added that people arriving from other centres like Hamilton and Palmerston North had commented on the high rental prices in Napier, yet despite the figures there was still a strong rental market.
Professor Hargreaves said landlords had seen rises in capital gain in recent years, but would be now looking at rentals to get some profit.
"When you take out the capital gain part of the equation, you're not left with much."
He said there was a strong correlation between rents and wage rises.
Andrew King, vice president of the New Zealand Property Investors Foundation, wasn't surprised by the increase.
"It wasn't unexpected and was a little on the lower side, if anything," Mr King said.
"There has been a huge increase in demand for rentals. Our members are getting phenomenal responses."
Mr King said the cost of buying homes, particularly for first-home buyers, was driving the increase in rental demand because people were renting for longer while they saved a deposit.
Napier rental properties as advertised in February 2007: Two-bedroom flat in Ahuriri - $170-$180 per week. Two-bedroom cottage on large section - $230.
Napier rental properties as advertised in March 2008: One-and-a-half bedroom flat with large lounge - $210. Two to three-bedroom house in Napier South - $285.