Law, insulation changes expected to be passed on

Rotorua rents have increased a whopping 71 per cent over the past 20 years with 31 per cent of the increase occurring since 2013, and a local expert predicts more rises are still to come.

With rental law changes in the pipeline coupled with insulation requirements coming into force next year, there is a real chance landlords will choose to pass on additional costs to their tenants.

Since 1998, the average weekly rent price in Rotorua has increased $176.80, going from $158.30 in 1998 to $335.10 in 2018 to date.

However, in the decade between 1998 and 2008, the average rent price was relatively stagnant, increasing $62.50.

In the past decade, during half of which Rotorua has been enjoying a property boom, the average rent price has gone up $114.30.

Coupled with crippling stock numbers, the price increases have hit renters in the city hard, but it is possible to find a happy balance, a local property manager says.

Melissa Ruebe believes landlords and tenants are equally as important in a rental agreement, as is a fair market rent.

“So many people place priority on the owner of the property as opposed to the person paying the rent,” Ruebe said. “For a landlord, a great tenant represents rent being paid on time, every time, and also someone who will look after your investment.

“A bad tenant, for whatever reason, can mean missed rent and damage, which is often hard to get back.”

Ruebe was adamant there was a big difference between fair increases and greedy landlords.

“It’s not the tenant’s fault if a landlord has a big mortgage or if changes are made to tenancy laws.

“Continual or hefty increases can be detrimental to landlords as tenants either struggle to make the increased amount and miss payments or leave to find cheaper accommodation. “Almost every time a tenant leaves a property, there is a period of missed rent. I believe it’s better to be getting a fair rent 52 weeks of the year as opposed to an inflated amount some of the time.” Ruebe said while it was a tough time for landlords, tenants and property managers, the latter often finding themselves in the middle of increases, things were a lot easier if there was a good rapport between the parties. “I have had a few conversations with some landlords who want to increase a rent to what I believe is unrealistic for the market but, at the end of the day, if that’s what they want to do, that’s what I have to tell the tenant. However, there are some cases where everyone remains happy.” Rotorua Rentals co-director Richard Evans said he believed tenants were getting more for their money, but warned the rental prices would get worse before they got better.

“It’s a mix of not enough houses being built, population increases and landlords selling up that are contributing to rising rent prices.

“But this is not specific to Rotorua, look at New Plymouth, Tauranga, Napier — they’re all experiencing the same kinds of increases.

“I wouldn’t be surprised if we saw rents increase to $500 in Rotorua next year. It’s just the way things are going at the moment, it’s supply and demand.”

He said rent prices going up had hit renters hard, but in his experience, there were only “one or two scumbag landlords” and the rest “respectful and considerate”.