Tauranga investor predicts widespread rental shortage as landlords exit

Investor predicts rental shortage coming for Tauranga. File / Photo

A Tauranga property investor says the city could be heading for a widespread rental property shortage as "a huge number" of investors look to exit the market.

Simon Darmody, president of the Tauranga Property Investors Association,
which has 270 members, said he had noticed investors "putting the brakes on" before the election.

"I have been involved with investors for around 20 years and this is the first time I have seen such a huge number of investors contemplating exiting the market."

Investors were concerned about "punitive sentiment" from the new government as well as negative public sentiment towards landlords.

President of the Tauranga Property Investors Association Simon Darmody. Photo/supplied

"There has also emerged a widespread hatred and constant barrage of negativity to landlords in general who have in the past been thinking they have been doing a good service for the community and also providing for their future."

Investors exiting the residential market could free up houses for first-home buyers but this would not help renters.

He agreed with this week's prediction from Property Institute chief executive Ashley Church that the cost of renting would replace the price of housing as the top housing issue in 2018.

"If the current situation continues or worsens we could see a widespread rental property shortage," Darmody said.

Housing Minister Phil Twyford told Fairfax this week that he viewed increasing housing supply as the only way to seriously keep rental prices in check.

The Government has promised to build 100,000 affordable homes over the next 10 years while modernising tenancy law and introducing healthy homes legislation to ensure rentals are warm and dry.