The number of Rotorua rental properties available has fallen by 15 per cent in the last 12 months as the housing ''crisis'' deepens and up to 50 people show up for one viewing.
One rental agency owner says the situation was ''crazy'' and more houses were needed in the city.
Figures from Trade Me show the median weekly rent in the city climbed to $480 last month, a $20 a week, or four per cent year-on-year hike.
Demand for rental properties had also increased by seven per cent last month and the number of properties in the city for rent fell by 15 per cent in 2021.
Trade Me property sales directors Gavin Lloyd said lack of supply and rent rises would be a "bitter pill" for renters to swallow.
Rotorua Rentals director Pauline Evans said the rental market was in crisis and the number of applications she was fielding ''is crazy''.
''At a recent listing we saw 40 to 50 a day which is not unusual.''
Evans said there were still a few three-bedroom houses available for $480 but they would certainly be small properties and not in a desirable suburb.
"More than likely this amount of rent would be for a two-bedroom dwelling.
"We are in a housing crisis due to the high level of demand and low housing stock levels. I do not see this changing in the short term, we need more houses."
She said rent caps had been tried before and in her view they did not work.
If that happened ''we would see more exodus of landlords from the rental landscape."
There was genuine concern about the next level of standards and changes that may be imposed on private landlords.
Sought after suburbs for renters included Lynmore and Springfield while being close to schools, transport and CBD were on some tenant's wishlist.
"We and our owners are being far more selective than ever before and this is having a knock-on effect as it slows down our process of checking."
Rotorua Property Investors Association president Sally Copeland said there was no doubt that there was a housing shortage in the city driving up rental prices.
"That coupled with the interest deductibility being removed and increased government regulations are going to make it more expensive to rent properties."
Copeland said in terms of the size of a rental property, $480 was likely to get you a two-bedroom property.
"We need more houses in Rotorua."
Copeland said capping rents may not be the answer to lessening the housing shortage.
"I would expect rent caps would likely force private landlords out of the market as it may mean their income would not cover expenses. This in turn would increase the need for more social housing.
"I believe the market needs a mixture of both private and government property owners to cater for the wide range of customers seeking rental properties.
"The majority of landlords are in it for the long term, but some have exited the market due to regulatory changes, some have sold older houses and replaced them with new builds.
"Hopefully, we will see the Government's increased income generated from the increased tax burden on landlords reinvested into housing or increasing accommodation supplements," she said.
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Simon Anderson, there had been "very strong" demand in Rotorua and Tauranga for rental properties in the past 12 months to two years.
Anderson said some of the shortage was due to some landlords who had sold up because of rising compliance costs and tax changes but new investors were entering the market.
"The real estate market is the market and anyone who owns a rental or investment property obviously wants a return.
"I think this year we're likely to see a bit of flattening out in the demand for properties with more steady sustainable capital growth, and new properties getting built and more rental properties becoming available."
However, he said that depended on the supply chain which was slowing down the speed of new builds and renovations. Some people were waiting up to 30 weeks to get gib board.
The most popular rental property last month on Trade Me was a four-bedroom home in Fairy Springs, for $610 a week, which attracted 24 enquiries within the first two days.