Tenants stung by rent hikes

Rental prices are reaching record highs.

Rotorua renters are being hit by rising rental property prices, according to new figures.

Trade Me's January property index showed the median price of a Rotorua rental property increased from $250 per week in January 2014 to $270 last month.

Russell Hardie Rotorua property manager Donna Russell said there were rent increases across all property types.

"There's always high demand for four bedroom properties so we can always get good rents for them," she said.

"It's across the board, though. I've been putting my one and two bedroom properties up by $10 as they've come up in the past year."

She believed several factors were behind the increase.

"There's a lot of media hype around rental increases, which I think has probably triggered landlords to think about what rent they're getting.

"There's also a bit of a shortage of rental properties. We're reviewing our properties across the board regularly."

Landlords' costs were also up, she said.

"When it was just GST that was increasing, I think most landlords thought 'oh well, we'll wear it', but now it's the GST, the insurance, everything.

"Landlords now seem to be thinking 'enough's enough - if I can get a better rent, I will'."

Ms Russell expected higher priced property rents to continue to increase but lower priced property rents to eventually plateau.

Nationally, weekly rents rose 9 per cent year-on-year to a median rent of $420 a week.

Head of Trade Me Property Nigel Jeffries said the rental market was "sparking into action" after a stable and relatively quiet 2014.

"The 9 per cent year-on-year increase in January is the largest single-month rise we've recorded over the past five years," he said.

"Median weekly rents clicked up $20 per week between December and January to a record high of $420 per week. That's grim news for tenants."

The increases were due to landlords wanting better returns on their investments in light of "relentless growth in property prices", Mr Jeffries said.

"It was more a question of when, not if, landlords were going to start recovering some level of yield. It looks like that signal has flowed into the market this month and started to sting tenants in the pocket."

Rents for five-bedroom homes were particularly high - up 7.7 per cent year-on-year to a record of $700 per week.

Rents for medium-sized homes were also strong, Mr Jeffries said.

Eight regions surged to new record median rents, and another four regions reported increases compared to a year ago, he said.