Landlords continue to reap the benefits of the lack of rental supply in Whanganui.

Whanganui Harcourts real estate agent Sue Ellis said there was a real shortage of quality properties in the region, and the River City was experiencing the same supply problem as Auckland.

Property Institute predictions released last week listed the cost of rent as the number one issue for 2018.

"The cost of renting will replace the price of housing as the number one housing issue in 2018," said institute chief executive Ashley Church.


"The housing polices of the new government, combined with uncertainty around housing investment over the next few years, will 'scare' some property investors out of the market, creating a crisis in the number of dwellings available for rental."

Mr Church said the aqueeze on rental accommodation would be made worse by unusually high inward migration, loan to value restrictions and compliance costs.

"As a result, we're in for big rent increases in some parts of the country over the next couple of years."

Ms Ellis pointed out that regional markets were quite different to Auckland, but said: "The abandonment of rental properties comes back to the fact that by 2019 they've got to be compliant on insulation — that's a cost a lot of the current investors don't want to bear."

Major Glenn Anderson, from Salvation Army Whanganui, said the tight rental market was causing issues for them as they tried to secure emergency housing and long-term properties for their clients.

"We have now got seven properties, but that's been a long journey of about 14 or 15 months."

Mr Anderson said it was a challenge helping clients transition while the market was still very tight, and he said another issue was "unscrupulous landlords who are milking tenants, with no social conscience".

"Housing Minister Phil Twyford is right in saying the only solution is increasing supply."