Rotorua rental market 'getting worse and worse'

New figures for April show the average weekly price of renting in Rotorua has risen by $50 in the last 12 months. Photo/Ben Fraser

Rising rent prices and dwindling properties available have Rotorua tenants constantly worried about having to find a new rental in a market that is showing no signs of relief.

The latest Trade Me Property Rental Index shows the average weekly price of renting in Rotorua has jumped to $340 - an increase of $50 in the 12 months to April.

Professionals McDowell Real Estate business development manager Stephanie Trainer said the market was "crazy".

"I would have thought the average increase would have been more than $50. In the last year I have seen a lot of properties that have gone from around $250 to $350.

"The market is particularly hard for those whose rental homes are being put up for sale and they are given 42 days' notice.

"We have some small units on the books and higher-end family homes but there is nothing in the mid-range which is what everyone is after."

Ms Trainer said she had never seen the rental market like this in her six years at the agency.

"When I first started we had pages and pages of rentals. Now we're lucky to have two pages. Tenants are worried and if they can avoid it, they're not moving because they know there's nothing to go to."

But not all rental agencies have seen big price hikes, with one also reporting a lift in rental properties available.

Simon Anderson, chief executive of Realty Services, which operates Eves and Bayleys, said while there were still low levels of rental properties available, Eves had begun to see a lift in stock numbers.

He said they had not seen big hikes in rent prices with one property renting for $280 12 months ago, now sitting at $330 to $350.

"The big increases are likely for bigger homes. A typical Rotorua rental property will have seen an increase of between $20 and $40.

"In any market, supply and demand drive prices.

"In Rotorua there's a two-prong attack for tenants because there is a shortage of stock and a capital lift - with that comes property owners expecting a bigger return on their investments."

Russell Hardie Rotorua managing director Donna Russell said for the first time her agency last week had no three-bedroom homes to rent.

"There was a rental shortage a couple of years ago and I didn't think it could get worse but now I am watching the market and even after a year of sustained busy periods, it is not stagnating, but getting worse and worse. I have never known the market to be this bad."

But Ms Russell said there was good that came from the situation.

"Tenants are staying longer and landlords, who are getting more for their investments, are able to reinvest into their properties, creating healthy, warm homes."