The median rent in Rotorua has dropped slightly after January's spike, according to new figures, though a local property manager says demand for homes remains high.
Trade Me's February property index showed the median price of a Rotorua rental property dropped from $270 per week in January to $257.50 last month.
The last two Februaries had median rents of $260 a week.
Property Cycle co-owner Aimee Christie said she had not noticed a change in rental prices, though demand for rental properties was high.
"Properties aren't sitting long. We've been getting lots of inquiries on properties and we're managing to find decent tenants as well.
"Last February, it was quite hard to find tenants, no one was on the move. Now there's a lot of demand out there."
Mrs Christie was unsure why demand had picked up.
"Tenants are definitely wising up to quality aspects of a home like insulation and heating.
"I do wonder, approaching winter, if that is a part of the reasoning.
"There's also been quite a few articles about Rotorua and the good investment areas. That's potentially promoted Rotorua a little bit more." Landlords were also "wising up" about what tenants needed, she said.
"I think the renting warrant of fitness - though it hasn't come in yet - has got landlords thinking more about what they should be providing for tenants."
Nationally, weekly rents rose 6.5 per cent year-on-year to a median rent of $410 a week. This was just below last month's all-time high of $420 per week.
Head of Trade Me Property Nigel Jeffries said the rental market had tipped in favour of landlords.
"There is strong demand from tenants, but supply is tight. We've seen a noticeable fall in new rental properties coming on to the market since the start of the year, down 12 per cent across the country.
"That all adds up to an annual increase for renters."
Mr Jeffries said the rental market was directly affected by rising property prices, as landlords aimed to align rents with property values and improve returns.
One to two bedroom property rents increased by 8.3 per cent, year-on-year, to $325 per week. Three to four bedroom rents increased by up 9.5 per to $460 per week and five or more bedroom rents rose 6.9 per cent to $690 a week.