New data shows Bay of Plenty was the most expensive place to rent last month

The most expensive district in the Bay of Plenty region in June was Tauranga. Photo / File

Three hundred applications in two months - that is how one Tauranga man found a home for his family amid a shortage of rental properties in the most expensive region in the country.

For the first time ever, median rent in the Bay of Plenty has surpassed both Auckland and Wellington, making it the most expensive place to rent in New Zealand.

Matua residents Jahed Iqbal with his wife Tabassum Iqbal Tushaand and nine-year-old daughter Sabriyah Ruquiya Alisha. Photo / Supplied

For newly-relocated Matua resident Jahed Iqbal, the price was less of a stress than it was actually finding a property before he started his new job.

He and his wife and daughter were living in Ōpōtiki the last two years, but after a job offer needed to move further west.

But it took months for him to be able to secure his new $575 a week three-bedroom home, having started applying in early April.

He got more and more frustrated after each unsuccessful application, which by the end of his search at the end of May totalled more than 300, he said.

"It was a hard struggle."

He found out when he left his Ōpōtiki home the new tenants were paying $100 more a week.

James Cairn has rented his Ōtumoetai home for the last three years and in his view renting was a poverty trap.

The first year the rent was $590 per week. But the next year, it was pitched to go up to $670. They settled at $650.

Cairn and his family were left unsettled when they were advised the rent would increase to $750, the reason they were told being rates and other things being so expensive, including maintenance costs.

He and his family were now in the process of moving to Australia, where they hoped they would fare better with a higher rental vacancy rate.

"We don't want a lot, however, I want my children to have a stable base they can call home."

Trade Me's June Rental Price Index shows lack of supply in the region is driving prices up.

Trade Me Property sales director Gavin Lloyd. Photo / Supplied

Trade Me Property sales director Gavin Lloyd said the median weekly rent in the Bay of Plenty reached a new high of $610, marking an 11 per cent year-on-year increase.

When compared with the month prior, there was a 2 per cent increase.

Rent growth came down to supply dropping 5 per cent compared to the same time last year, which left renters with fewer options and higher prices.

By comparison, the Wellington region saw supply increase by 51 per cent year-on-year in June, while Auckland saw a 15 per cent jump.

Despite demand for rentals in the Bay of Plenty dropping by 15 per cent year-on-year in June, dropping supply meant this was not enough to see price growth cool off, Lloyd said.

The most expensive district in the Bay of Plenty region in June was Tauranga, where the median weekly rent increased 11 per cent year-on-year to $640.

In the Rotorua district, the median weekly rent was $550 in June, jumping 12 per cent year-on-year.

"Looking ahead, if rental supply continues to fall while demand remains high in the Bay of Plenty region, we are unlikely to see prices cool off."

Rotorua Budget Advisory Services manager Pakanui Tuhura warned increases in rental costs could not be ignored.

"Having a roof over your head is a basic human right."

Rather than moving, clients in Rotorua were doing anything and everything to keep that roof over their heads, he said.

Rotorua Budget Advisory Services manager Pakanui Tuhura. Photo / Andrew Warner

This included taking on extra jobs, bringing in family as boarders, buying less food or even changing dietary habits by not buying meat.

"In Rotorua they have been doing this for quite some time now, so my biggest worry is, what will happen to the rent price of houses where the landlord has taken out loans to cover the cost of purchase and development, and the interest rate on those mortgages goes up?"

There were two basic financial stresses at the moment, he said: not having enough money to cover accommodation, food, power and other costs, and not having enough money to repay debt.

Tauranga Rentals principal officer Dan Lusby said while there was a rise in available properties last month, the dozen on its books were quickly snapped up.

He said Tauranga's average rent for a one-bedroom rental was in the $400 to $500 bracket, two-bedrooms between $500 to $600, three-bedrooms between $600 to $700 and four-bedrooms were $700 to $800 per week.

What he believed was driving demand was as employment immigration heated up, so did the inquiries for rentals from overseas.

He said supply was still slow as new builds were taking longer to become available due to building material shortages.

James Cairn has rented his Ōtumoetai home for the last three years and in his view renting was a poverty trap. Photo / Mead Norton

"And of course, we still have internal migration to our great region and very low unemployment."

He did not foresee the situation getting better in coming months.

Tauranga area First National Real Estate manager Cameron Hooper said things had plateaued off somewhat over the past few months, and expected things to ease.

Referring to the increase of supply in Wellington and Auckland, but not in Tauranga, he said the same was true for sales listings.

It had been stagnant, "with 1600 listings for sale for weeks now, and in fact, last week dropped by 20 houses as the opposite was happening in Auckland and Wellington".

He believed by the time the next report came out prices would have dropped, but it would not be drastic.

"Landlords are becoming a little more realistic and asking prices are levelling off."

Most property managers were "stepping into bat" and advising landlords if a rental amount is achievable or not.

In June, the most popular rental in the Bay of Plenty was a two-bedroom house on Oropi Road in Tauranga, with a weekly rent of $400. It received 169 watchlists in its first seven days on-site.

Hooper said Oropi is the Holy Land, and at that price said it was under-rented.