Rents in Rotorua have reached record levels. Photo / Getty Images
Unvaccinated tenants who have lost their jobs and can't afford to pay their rent are raising new dilemmas for property managers as rents hit record highs in Rotorua.
Figures from Trade Me show last month the weekly median rent in Rotorua was $520, compared with $450 in November last year.
Demand is up 23 per cent year on year and supply is down 7 per cent as people from other cities look to relocate due to costs of living.
Demand is so high a two-bedroom unit received 42 inquiries in its first two days.
Rotorua Rentals director Pauline Evans said the vaccination issue had "come to light recently" and was "very stressful for all involved".
"Tenants who have refused to be vaccinated were losing their jobs and as a direct result having to leave their tenancy.
"We have had to be extra aware as we are dealing with an emotive unvaccinated person and the possible repercussions that can result."
Evans said one tenant made a decision to vacate a property as "they could see no way to pay the rent moving forward".
"We did not and cannot give a tenant notice in these circumstances. It is a tribunal order or we accept notice from the tenant which is what we did.
"As hard as this situation is, the positive is we have another rental available for a new client."
Professionals McDowell property management team leader Aisha Okeremi said more people were moving to Rotorua as they struggled to afford to live in their home towns.
She expected that trend to continue as working remotely became more popular.
"We are seeing more people from surrounding cities like Hamilton and Tauranga moving to Rotorua where prices are more affordable and where they hope there is more of a supply."
However, demand continued to outstrip supply as rents hit new records.
"This is no doubt discouraging for tenants who are already struggling to find something within their means. There's a view that landlords are all greedy and money grabbing, but this is far from the truth.
"We have a lot of great landlords who do their best to keep things affordable for their tenants, but the fact of the matter is costs are increasing for them across the board."
Okeremi said it felt great to be able to find an owner a fantastic tenant, especially when they had been looking for a long time.
However, dealing with individuals and families who had been knocked down countless times through no real fault of their own was a challenge.
"The short of it is, there are often plenty of good applicants applying. Unfortunately, at the end of the day, that means people miss out. Some accept it's the current market, whereas others take it very personally.
"It's generally a stressful and emotional time for tenants and our staff do often cop blame when people miss out."
Evans from Rotorua Rentals said she had also fielded queries from people who wanted to move to the city.
But rising rents were having flow-on effects on tenants, some were struggling financially and "the tensions are building".
Simon Anderson, managing director of Realty Group, which operates Eves and Bayleys, said there was a shortage of rental properties as demand surged.
Increasing property values meant landlords would look for a return on their investment.
"So you have a demand factor and a return factor which is reflected in the price of rents."
He acknowledged some long-term investors had cashed up but, despite tax-deductibility rules and other regulation changes, there were new investors coming to the market.
"They know what they are facing and have accepted that. So we have seen a new crop of investors, which is great because they also provide housing opportunities."
Rotorua Property Investors Association president Sally Copeland said it was still possible to get a property in the city where the income covered expenses.
However, the margins were tighter.
"There was a time when a 10 per cent gross yield was achievable in Rotorua, however, in current times you are looking at 5 to 6 per cent."
She said landlords prided themselves on providing quality homes.
"Many landlords consider their rental portfolio as a business with tenants as their customers."
Trade Me Property sales director Gavin Lloyd said demand in Rotorua had increased 23 per cent year on year in November, and supply had fallen 7 per cent.
"We're now entering a typically busy time of year for the rental market, and with the added impact of Auckland's border opening up we may see more increases across the board in the New Year."
He said the most popular rental property in Rotorua last month was a two-bedroom unit in Perepe St in Mangakakahi for $325. It received 42 inquiries in the first two days of being listed.
Last month the Ministry of Business, Innovation and Employment said a person's vaccination status was personal information that fell under the Privacy Act.
Building, tenancy compliance and investigations national manager Steve Watson said at the same time the Human Rights Act also prevented discrimination against prospective tenants. It was unlawful not to grant a tenancy to a person due to their race, nationality or disability.
"Disability includes physical illness or the presence in the body of organisms capable of causing illness, this includes Covid,' he said.
Tips to getting a rental
• Be prepared. As soon as you see a house you are interested in, register for a viewing and complete an application form and attach as much information as you can.
• Do your absolute best to make it to the viewing time.
• At the viewing, listen to the host and respect the rules.
• Notify your references that they may be getting a call.
• If you have questions about the property, note these and send an email to the property manager.
• If you know you have imperfect history, be honest and up front as they will come out one way or another.
- Source: Aisha Okeremi
The Government has no concerns about the development on state land in Ngongotahā.