Renters are too scared to move and those in motels are stuck there with a dwindling housing stock. Photo / Getty Images
Renters in the Bay of Plenty are ''too scared to move'' and staying put with others still holed up in motels or sleeping on couches - as the rental crisis deepens.
New figures show median rents have gone up $2860 in two years to $29,900 a year in Tauranga while in Rotorua it has jumped by $4680 to $25,480 a year over the same timeframes.
Meanwhile, landlords were feeling ''pretty disgruntled'' and some had sold up in response to the Government's tax changes.
IFindProperty founder and co-owner Maree Tassell said the majority of landlords cared about their tenants but were regarded as "evil" and "greedy" while they were just business owners.
"Of course they want to make some money, but it would be like asking a restaurant owner, do you care about your patrons having a good experience... well you should be charging less.
"Running a business and helping people should not be mutually exclusive, they can work together."
She said there was less rental stock because it was "too risky" for investors following a flurry of law changes both financially as well as with the tenant choice in the new difficulty to evict difficult tenants.
Tassell said she was already charging below-market rent as one tenant had lost their job due to Covid and another was sick, and she was concerned about what would happen to them.
"Most of the investors I deal with really do care about the wellbeing of their tenants."
She said they were encouraging investors to stay, think differently, and not be scared of working with social housing providers.
Rotorua Budget Advisory Service manager Pakanui Tuhura said renters were bringing in boarders or family to help with costs and those in motels were stuck there with no suitable, affordable accommodation.
He said it was a good thing rent could only go up once a year as people could prepare for reviews in advance, and it wasn't as much of a "big shock" when they went up.
Rather than rent increases, he said there was a greater fear of landlords selling the property, even with the 90-day notice being scrapped.
Clients who lost their rentals moved into emergency housing where they began to look for other accommodation.
"Competition for rental homes is very strong and landlords are very picky about who they want in the homes they are renting and what weekly rent they want from it."
Rotorua Rentals owner Pauline Evans said family-friendly housing near schools, and other amenities were getting harder to find under $500 a week.
"They are higher priced dependant on condition, size and location.''
Those priced under $490 a week were more likely to be a unit or semi-detached dwelling on a smaller size section and further from the town centre.
''Certainly not in the more popular and sought-after suburbs.''
In her view, ''the biggest challenges to our industry is the resentment from investors of the Government regulations and tax changes''.
''Investors are not being seen as a solution to the housing crisis.''
She said 78 per cent of investors in New Zealand only own one rental property.
Managing director of the Realty Group, which operates Eves and Bayleys, Simon Anderson said there was a shortage of properties available and the pressure on the market hadn't changed.
Some of their landlords had sold but not a lot and new investors were looking at the property market.
Meanwhile, Tauranga Property Investors Association president Juli Tolley said rent increases weren't keeping up with additional costs for landlords, and investors were selling up.
The combination of increasing rates, insurance, maintenance, and additional compliance has "already begun to push circumstantial investors to sell some property" and she suspected there would be more in the coming years.
She said investors were feeling "disgruntled with the latest attack by Government" to eliminate the deductibility of interest and the extension of the bright-line test.
Laws were being passed with minimal consultation, she said, and a lack of detail left investors feeling uncertain leading to some reactionary selling of properties with interest rates set rise.
The first wave of investors caught by the five-year bright-line will be freed up in 2023 and that will likely see more selling, she said.
"Investors that have one or two properties they've bought in the last few years are the ones most hurt by all these changes."
Tauranga Rentals owner Dan Lusby said his staff were finding houses internally for tenants as some of its landlords sold up.
That meant those houses weren't advertised as demand outstripped supply.
More people who were suited for social housing were also applying ''but we can't help them''.
''They are in motels or sleeping on couches and at friends or relations. They are desperate for somewhere to live and unfortunately, we can't help them because they have a bad credit history or haven't been good tenants in the past.''
''We can't take the risk when there are a lot of good tenants around.''
Lusby said $575 might get you an average three-bedroom home in an average area and most were at $580 or more and the most expensive it had was $900 a week.
Tenants were also ''staying put, they don't want to move'', they are too scared to move in case they don't get somewhere else''.
Trade Me Property sales director Gavin Lloyd said In Tauranga, the median weekly rent had increased by seven per cent year-on-year in June to $575.
The number of rental properties on the market dropped by 22 per cent year-on-year in the district, while demand increased by 14 per cent.
In Rotorua last month the median weekly rent in Rotorua was $490, marking a 7 per cent increase when compared with the same month last year.
Rental market supply dropped by 11 per cent in June and demand climbed by 40 per cent year-on-year in June.
''Time will tell whether rents will continue to climb as we enter a busier time in the market later in the year as a result of landlords passing their increased costs onto tenants.''
Housing Minister Dr Megan Woods the housing packages announced in March aimed to take heat off the housing market, tilt it towards first-home buyers, and encourage new builds to increase housing supply.
"Consultation on these changes closed recently so it is inaccurate to say there has been minimal consultation."
She said costs around rates, insurance, and maintenance should be factored into homeownership, and are outside of Government responsibility.
The interest deductibility changes will be phased in over four years, with the first period beginning in October.
She encourages investors to look into the advantages of investment in newly built properties – including Build to Rent – if interest deductibility was a key factor in their investment decisions.
She said an investment of $3.8 billion into infrastructure would ensure councils and developers get access to build-ready land to start new, affordable housing developments.
- Additional reporting: Carmen Hall
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