Asking prices for rentals in Rotorua have hiked 7.1 per cent since the beginning of last year, twice as much as the national increase, with many people struggling to afford a place to live.

The latest figures from the Trade Me Rental Price Index reveal the median weekly rent in Rotorua rose to $300 during the past year, up from $280 in January 2016.

In comparison, rental prices in New Zealand have risen 3.4 per cent on average in the same period.

LJ Hooker principal Malcolm Forsyth said high demand for the few available rentals had driven prices up.


His agency has fewer than 10 properties available for rent, with many more prospective tenants than properties.

Mr Forsyth attributes this demand mainly to a decrease in the "natural migration" into home ownership, which was once common.

He said there was also a flow-through effect from rental price increases in other regions, but Rotorua had a particular problem with supply.

Many people in Rotorua are struggling to find rental properties, Mr Forsyth said, but they were also having to pay significantly higher rents.

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He now sees a number of tenants unable to afford the few properties on offer.

Rotorua Rentals owner Richard Evans said he was frustrated there were not enough properties in Rotorua to cover demand.

"I advertised a town house last night and had nine inquiries almost right away ... there was one person who wanted to take it sight unseen," he said.


"I know a lot of property managers throughout New Zealand who are having the same problems ... so it's a bit stressful at the moment.

"There seems to be a lot of people moving here from out of town, which is a good thing for the city, but we don't have enough accommodation for them.

"Rents for beneficiaries are getting so high their accommodation supplements won't cover the costs of their rentals.

"What also worries me is that some investors are doing their maths based on very high rents and some homes can sit empty for months before they are they are rented out."

Eves Rotorua sales manager Don Gunn said there was definitely a shortage in properties.

He said those who were good tenants and had references that stacked up could normally find rentals but it was tougher for those who didn't.

Mr Gunn said when a new listing became available there were typically between 10 and 15 people applying.

"It is pretty strong competition for the properties."

In other areas, Hawke's Bay recorded the largest regional increase in rental prices of 12.5 per cent, and Wellington rents reached a record high of $480.

"This level of inflation is far above the level of consumer and wage inflation," Trade Me Property head Nigel Jeffries said.

"It's an ongoing struggle for those feeling stuck in the rental market."

Canterbury, Gisborne and the West Coast were the only regions where rents decreased in the year to January 2017. Taranaki saw no change in rental prices.

- Additional reporting Rebecca Malcolm and Matthew Martin