Rotorua median rents at all-time high of $387 per week

Want to rent an average home, in an average location in Rotorua? That will be $20,124 a year or $387 a week, thank you.

That's according to the latest figures from the Ministry of Business, Innovation and Employment which show the median price of rentals in Rotorua as of February was $387.

It's up 12.8 per cent on February last year and a whopping 45.5 per cent on February 2014, five years ago.

Local experts say upcoming and proposed changes to legislation affecting rental homes have brought about a drastic shortage of rental properties in Rotorua as rent prices continue to rise.

Yesterday there were just 68 rentals available on Trade Me for the whole of Rotorua.
There are 13 listings on OneRoof.

Russell Hardie owner-operator Donna Russell said the agency had five houses available for rent last week and that was the most they'd had in a long time.

"There is no stock available and demand is outweighing the stock.

"The beginning of the year is always really busy and then it tapers off and in April the stock will replenish.

"About four years ago it was nuts and it didn't replenish. I thought 'how long will this sustain?', but it's been like that ever since."

Russell said proposed and incoming legislation would continue to affect the rental market because it meant being a landlord became more expensive.

"At the moment we can only increase rent once every six months. Landlords are increasing as much as possible now. If that new legislation comes in where they can only do it every 12 months, the increases are going to be huge."

Upcoming changes to legislation could force landlords out of the market. Photo / File

Russell said when houses became available for rent they were snapped up immediately.

She said it was becoming harder to be a landlord.

"The Healthy Homes Bill is a game changer for a lot of landlords.

"I can't see that the market is going to improve. In fact, it will probably get worse because the pressure on landlords is going to be too great.

"They don't have money to meet all these legislative changes."

Rotorua Rentals owner Richard Evans said his agency had advertised a house last week and within 24 hours he had 27 written applications.

Evans said the rental market had been getting worse for about 18 months.

"Unless they [the Government] make it easier for landlords to be landlords two things will happen; rents will keep going up and supply will keep going down."

Rotorua Rentals had three houses available online. Rent Assured property manager and director Tracie Williams said houses often attracted 30 applications or more and those who didn't get in quickly missed out.

"It's first in, first served. If we find a good person at the beginning they get picked.

"If they are prepared they've got a better chance."

Williams said many rentals were taken within a week of being advertised.

"It's a bit of a sad situation. Some people have got very sad stories but we've not got enough houses to put them in," she said.

"I gave someone a property [last week] and she was in tears. She had been looking for ages and didn't know what she was doing wrong."

Upcoming changes to legislation could force landlords out of the market. Photo / File

Williams had also noticed a rise in landlords selling due to legislative changes.

"Owners are putting houses on the market, I think a lot of owners have had enough.

"We need investors and we can't get enough properties for tenants."

Williams said she had noticed a rise in rents over the last couple of years.

"They've made a lot more gains. I don't know if it's going to get any better with the letting fees dropped."

A further breakdown of median rent prices from the Ministry of Business, Innovation and Employment revealed the Kuirau/Hillcrest/Glenholme area had the lowest median rent in the city of Rotorua of $330.

The Pukehangi South/Springfield area had the highest median rent of the recorded suburbs of $425.

Rural Rotorua had median rents of $305.

Key changes
Healthy Homes Bill
By July 2024, all rental homes must;
• Have a heater that can heat the main living area to 18C.
• Have compliant ceiling and underfloor insulation.
• Have extraction fans or range hoods in kitchens and bathrooms.
• Have adequate drainage and guttering to prevent water entering the home.
• Block draughts.
Letting fees
• In December last year letting fees were banned in an attempt to make landlords meet the costs of letting a rental property, rather than tenants.
Proposed Capital Gains Tax
• Proposed by the Tax Working Group in February.
• Would cover assets such as land, shares, investment properties, business assets and intellectual property.
• The Government will announce to the public if it will implement a CGT in April.
Residential Tenancies Act 1986 reform
• Proposed changes include scrapping no-cause tenancy terminations, limiting rent rises to once a year and extending the 42-day notice landlords must give tenants to 90 days.