Rents rocket to an average $400 a week in Hawke's Bay

Rental demand is high in Hawke's Bay. Photo/File

Sky-rocketing rents in Hawke's Bay are among the highest in New Zealand, and with letting agents and landlords facing increased costs over the coming year the situation does not look like slowing down.

Online data from Trade Me released yesterday shows rents across Hawke's Bay have leaped 14.3 per cent over the past year to reach $400 per week.

However, rental bond data kept by the Ministry of Business, Innovation and Enterprise show the rises in parts of Hawke's Bay are even greater - up nearly a $100 a week more in Tararua, where mean rents rose from $197 a week in April last year to $292 a week at April 1, this year.

A whole $78 of that hike came just last month, with the mean rent for the district up $78 a week, between March and April.

Landlords can only raise rents after a tenant has been in a property for 180 days, and then can only raise rent from 180 days after that. Based on the MBIE data an average tenant in Tararua would still have had to pay a combined $70 more over the last six months than they would have for the previous six months.

Meanwhile, rent in Napier averaged $405 a week at the start of last month - $24 a week more than in March, and $42 a week more than it costs last year.

Rents in Hastings have proven the steadiest around the district, up just $15 a week on the same time last year.

Rents also went up by $34 a week to $222 in Wairoa over the year period to April 1.

Tremains Rentals general manager Ruth Shannon said while demand was high for affordable rentals, rents on higher end properties had actually started to fall slightly to secure tenants.

'We've actually noticed in the last six weeks, and we've spoken to other companies and they agree, that the demand for entry-level rentals is still rally high at the moment but anything over $450 are not getting many inquiries at all.

"Definitely still high demand in the lower end - that $250 to $400 bracket but the higher end is hardly getting any enquiries. That's just an affordability thing."

Tenants at the higher end were looking to buy property, while investors were selling up and getting out of the rental market, and with proposals to scrap agency letting fees and new regulations around asbestos removal and insulation both still to come into effect, more rise could be on the way.

"There have been so many cost and regulatory increases over the last few years that it isn't a surprise that rental prices are increasing as they are," said NZ Property Investors Federation chief executive Andrew King.

"Unfortunately the situation looks likely to continue."

Head of Trade Me Property Nigel Jeffries said rents typically cool in autumn and winter, but April bucked the seasonal trend after strong demand for rental properties in the regions pushed prices north.

Jeffries said rents for properties outside New Zealand's three major metropolitan areas (Auckland, Wellington and Christchurch) climbed 3.9 per cent on last year to reach $400 for the first time.

Trade Me's Property Rental Index also shows New Zealand's national median rent reached a record-breaking $475 a week in April, following a 5.6 per cent jump on last year.