Heat going out of Tauranga's rental property market

Tauranga's rental market has begun to stabilise despite a continuing strong demand for affordable and tidy homes.

Real estate agents say even though the city's rental market is starting to slow down, the demand is still strong and one even warned rents could increase by up to $50 a week.

Dan Lusby of Tauranga Rentals said the market had slowed in the last couple of months and was headed back to where it used to be when supply matched demand.

''We have a full schedule of properties available, which is good for a change.''

He said the trend was in line with house sales that had definitely slowed and believed if it continued "rents will stabilise".

He had also noticed he was receiving more inquiry from social service organisations.

Lusby cited Ministry of Business Innovation and Employment figures that showed the average weekly rent for a three-bedroom Tauranga house for the six months to November 30, 2017, was $461 - only 1 per cent more than the $456 average for the six months to May 30.

He said the rate of increase in rents had slowed over the last 12 months, coinciding with a 144 (8 per cent) increase in the number of properties rented in Tauranga.

The lessening pressure was reflected in Ministry figures that showed 350 properties were rented in November, 2017, and it had been that way for the previous five months.

Lusby said the latest Trade Me listings showed 220 rentals were available in Tauranga, dipping to 160 last winter.

The only question mark on the path to more stable rents was the impact of Government changes on the rental market, including the Healthy Homes legislation which introduced changes to heating and ventilation. Landlords could recover the costs through higher rents, he said.

Karen Silby of LJ Hooker's property management department said the market had definitely stabilised.

They were getting in excess of 10 groups viewing each rental property compared to 20 a year ago.

They had no problem renting a good, tidy, well-presented property, she said.

BeHome Realty business manager Josh Fitzgibbon said they had a good supply of higher-priced homes but middle to lower income families were still struggling to find tidy affordable homes.

A lot of good landlords were coming in with rents below $450 a week for a basic three-bedroom house but new investors were charging the market rate.

He warned rents could lift by $40 to $50 a week to accommodate the Government's proposal to abolish letting fees, together with the Healthy Homes requirement.

His calculation also included the Government's proposal to make rent reviewable once a year instead of every six months, plus the inflationary pressures associated with insurances, rates and maintenance.

Fitzgibbon said it was still a wait and see if abolishing letting fees and the longer rent review period actually happened.

Lusby argued the market dictated what rents people paid, not what landlords decided.

Udana and Shadeesa Warnakulasooriya and daughter Siheli want to rent a house in Tauranga. Photo/John Borren

A Pak'n Save baker has been commuting from Rotorua for 16 months because he has been unable to find a rental home for his family.

''It is really tough,'' Udana Warnakulasooriya said describing Tauranga's rental market.

After nearly seven months, Udana and his wife Shadessa have widened their search area beyond the central city handy to his Cameron Rd workplace.

He said they had only got to view one property from more than 60 applications to landlords and rental agencies during the seven months.

Prior to that, the family had been accepted for one other viewing from applications made through Trade Me.

''It feels like it is too tough.''

Solo mother of three, Trudi Voss, said she was looking for another house because her new landlord had bumped up the rent on her Gate Pa property.

''We were struggling on $450 a week and now it has gone up by $10.''

Tauranga solo mum Trudi Voss is looking for a more affordable home after her rent was bumped up. Photo/John Borren

Voss said she was one of the lucky ones to get a house after spending nine weeks in emergency housing - a one room motel unit in Greerton.

''The novelty of living in a motel wore off. Who lives in a motel with three children.''

With clean references and an unblemished rental record, she put her housing woes down to being a solo mother on the benefit with three kids under five.

The need to prove she was doing all she could to find a house meant at one stage she applied for 100 houses a week after giving birth to her son.

''I owe the Government $5000 for emergency housing.''