FILE
The average cost of renting a home in Rotorua is up from a year ago - but it's not a case of landlords looking to make a quick buck, according to one.
Rotorua Property Investors Association president Debbie van ven Broek said landlords thought long and hard before putting rents up, but there came a point where they couldn't hold the rents with rising costs.
The mean rent for a three-bedroom house in the most densely rented area Ngongotaha/Pleasant Heights/Koutu was up slightly from last year at $265, according to data obtained from the Ministry of Innovation, Business and Employment.
The data is from the six months between the start of April to the end of September this year and is compared with the same period last year.
At the top end of the market in Pukehangi South/Springfield, average rent increased by $32 to $329, and at the bottom end in "Rural Rotorua", rent increased slightly to $260.
Mrs Van den Broek said the big increases in cost of insurance following the Christchurch earthquakes was a big factor, so too was no longer getting a depreciation refund, which landlords often used to help prop up the cost of a rental. "They may be finding they have no spare cash to top up the property."
Mrs Van den Broek said as a landlord she was very mindful of her tenants' financial status and was reluctant to put up rents. "$5 or $10 a week is huge and I'm really loath to do it. We really think twice before putting up rents and don't like to do it."
However, she believed Rotorua was still one of the most affordable places to rent and buy homes.
Russell Hardie Rotorua property manager Donna Russell said the main cause of rent increases was landlords' costs going up. "[Landlords] had been letting increasing costs ride, but now they're wanting to recoup."
When tenants moved out, landlords would often take the opportunity to increase rents by $10 or $20, she said.
The outweighing of demand over supply had also brought rents up, she said.
Ms Russell believed rents might increase slightly further, bringing the median rent for a three-bedroom house up from $270 to $280 but probably not beyond that. "I think there'll come a point when landlords say 'no, this is the market rent'."
Pam Jones of Pam Jones Property Management likewise said costs to landlords, including rates and insurance costs, had driven rents up.
High demand in areas such as Pukehangi South/ Springfield and Lynmore had also contributed to bigger rent increases in those areas, she said.
Nationally, the average rent for a three-bedroom house was up $15 to $379 per week.
Tenants Protection Association manager Helen Gatonyi said she was not surprised by the rent increases, as it was common for the association to hear of tenants whose rents had increased by $20 or $30, or in some cases, by $100 or more.
Landlords claimed they had kept rents down during tough economic conditions and were now just catching up, she said.
It was likely rents would continue to increase as supply and demand was still a huge issue, she said.
April to September average rents for 3-bedroom houses in Rotorua
Rural Rotorua 2013-$259 2014-$260
Ngongotaha/Pleasant Heights/Koutu 2013-$262 2014-$265
Pukehangi South/Springfield 20143-$297 2014-$329