Rent increase still relatively low

Rotorua median rent prices have increased $10 a week in the last year.

Rotorua median rent prices have increased $10 a week in the last year, according to the latest Trade Me Property Rental Index.

The average rental home in Rotorua now costs $280 per week, up from $270 a week in January last year.

When compared to Tauranga and Western Bay rentals where the median has gone up by between $50 to $80, Rotorua is still looking relatively cheap.

Richard Evans, business development and co-director of Rotorua Rentals, said "that could well figure because the rent raises didn't happen here until August/September. If you look at the figures again in June you will probably see something quite different".

"There is a shortage of rentals in Rotorua at the moment, people come in and we have nothing for them. It's quite stressful so we put the rent up here $15 or $20 there."

McDowell Real Estate rentals manager Carol de Farias said demand was surprisingly high although prices haven't increased much.

"I usually have around 35 available properties in my portfolio but, at the moment, I have around 18 or 20."

Ms de Farias said a small drop in available rental properties would have affected the availability of houses. Landlords sitting on properties since the market crash are selling as prices are more profitable. However, Ms de Farias said investors have been buying property too, offsetting those who had sold.

LJ Hooker Rotorua principal Malcolm Forsyth said he wasn't surprised and the rise, and expected rent would go up more.

Mr Forsyth said they were seeing a number of landlords taking the opportunity to cash up on their investments, and a lot of properties which were previously rentals were being bought by first home buyers.

Mr Forsyth said it was a case of supply and demand, and while the demand was there for rentals there was a lack of supply.

He said landlords were taking the opportunity to reassess rent when properties became vacant and were also reassessing it periodically at inspection times.

Mr Forsyth said there was a real difficulty finding rentals - especially around the $280 to $300 price point.

Ross Stanway, chief executive of Eves and Bayleys Real Estate, said Rotorua had always been a large rental market.

"I think what is significant is the average increase which is probably a sign that a number of those involved in the rental market may have possibly sold to home owners in the past 12 months.

Mr Stanway said there had definitely been a lot of activity in the Rotorua property market in the past 12 months, with a 70 per cent increase in the volume of sales and lot of properties changing hands.

Additional reporting by Kyra Dawson

Median weekly rent:

January 2015:

* Bay Of Plenty: $340

* Rotorua: $270

*Tauranga: $375

* Western BOP: $260

* Whakatane: $300

December 2015:

* Bay Of Plenty: $370

* Rotorua: $295

* Tauranga: $400

* Western BOP: $350

* Whakatane: $295

January 2016:

* Bay Of Plenty: $395

* Rotorua: $280

* Tauranga: $425

* Western BOP: $340

* Whakatane: $310