Tauranga tenants feeling the heat

'Ouch!” says Colin Poultney. 'It's going to be a bit sore.” He has just received a letter from his property manager and it was all gloom.

The weekly rental on his two-bedroom Brookfield unit was going up more than 33 per cent – from $190 to $300. It came out of the blue and was a hammer blow to Colin's back pocket.


Brookfield renter Colin Poultney browses the property and rental section of The Weekend Sun. Photo: Supplied.

'The rent will soak up nearly three-quarters of my pay packet,” he admits.

Other bills will take care of the rest for this service station worker on the minimum adult wage of $14.75 an hour, about $450 to $500 in his hand a week.

'But it's a nice neighbourhood, opposite a school and around the corner from a supermarket. It's desirable,” says Colin. So while the rent increase hurts, he can understand it.

Across town in Pyes Pa, another family are reeling from market forces.

A couple who've been paying $290 a week for the past six years have had their rent reviewed. They'll soon be paying $400 – another 33 per cent increase.

'In all honesty, the market tells us it should be $450 to $475 if we were renting it right now. But that would be unfair,” says Dan Lusby, business manager of Tauranga Rentals. 'So we have compromised at $400.”

These were just two anomalies in a market riddled with anomalies, as both properties were bargain rentals to start with.

But today it's an overheated market, a landlord's market, because demand for rental housing is far outstripping supply. And that impacts directly on what tenants are expected to pay.

'For example, 80 people applied for one property in just one week,” says Dan. 'Even though it hadn't been rented, we had to cut it off. We just couldn't take any more applications. We had 80 to process.”

People are desperate for houses according to Dan. 'There is a housing crisis,” he admits.

He says the number of available rental homes available in Tauranga has fluctuated between 140 and 170 over the past three months.

'And there have been hundreds of applications,” says Dan. ”Perhaps 50 for each of them.” The norm is 10-to-20 applications for one property.

Every day people wander into Dan's office to file an application for a Tauranga rental property. 'Not for any specific property, they are just after ‘A' property. They just say: ‘let us know'.”

In the last year average rentals have gone up $33.58 a week from $354.33 in October last year to $387.91 last month.

Meanwhile Colin Poultney is pondering the extra $110 he will be paying out for rent in January.

'That's the grocery bill going to the landlord,” he says, 'or dinner out and the movies a couple of times with my partner.”

However, they're happy to have enjoyed a good rental deal for two years while others are scrambling for accommodation.

In the meantime, they're looking for the ‘right house' for their own home.

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18 comments

Overit

Posted on 27-11-2015 11:53 | By overit

Is that actually legal to jump the rent up by that much in one hit?


Over the top

Posted on 27-11-2015 12:42 | By The Sage

I own rental properties and no way would i EVER put the rent up like that. In fact, quite the opposite, if I have good tenants I don't increase it at all. Very short sighted of that Landlord and right before Christmas.


overit

Posted on 27-11-2015 13:07 | By My Bit

said who ???


Target

Posted on 28-11-2015 10:02 | By penguin

Target specific MP's of all sides with this story (email this story) and insist on getting a reply as to what will be done to help this family NOW! Ask Opposition MP


@Saint

Posted on 28-11-2015 10:56 | By Bop man

Did you read the comment Overit is asking is that legal not stating that it is not legal. try reading before you comment. And I am with over it is that legal a 33% jump. or just profiteering by the land lords.


Landlords

Posted on 28-11-2015 11:24 | By Joanne

These current rental hikes are nothing short of despicable. New Zealand is a low-wage economy, most people who have to rent can't afford to pay these increases. Greedy landlords say it's a business for them. If that is how you think it's not a business you should be in. Rents should have a legal cap to stop greedy landlords.


Looks legal.

Posted on 28-11-2015 12:43 | By dgk

The Residential Tenancies Act states that the only limit on the amount of increase is if it substantially exceeds market rent. The story seems to suggest they are all below market rates.


IRD

Posted on 28-11-2015 13:02 | By firemansam01

Maybe if landlords are going to put rent up by that much maybe it's time to inform IRD make sure everything s above board


Pure ignorance

Posted on 28-11-2015 14:29 | By Kenworthlogger

The artical should be rewritten with the tenant thanking the landlord for years of unrealistically low rent. A quick google of adverage rent should take you to a govt website which will reveal that a two bedroom unit for Brookfield is $300 a week bringing it spot on. Joaane best you check before you tyoe next time, the land lord in this case is spot on the money. Greedy would be charging way in excess of what the going rate is. Joanne how about you put your money where your mouth is and go borrow hundreds of thousands of dollars for a rental and then rent it out for less than market rates and see how long you last before you go broke!


The

Posted on 28-11-2015 18:28 | By Capt_Kaveman

English came and now the English rent system, this is where the human race is so selfish, you work but the system will take it all off you by rent/power/


Kenworthlogger

Posted on 28-11-2015 20:30 | By penguin

There is a serious flaw in your argument. It relates to the capital outlay by the landlord and the rental required to cover that. Well, try this - capital outlay and rental relates to a time in history and is not necessarily linked to market rentals based on supply and demand. If the supply was


Penguin

Posted on 29-11-2015 09:39 | By Kenworthlogger

No flaw at all. Its simple if you borrow and buy the property today and rent it out at market rent today you will be lucky if you even break even. Thats assuming the tenant is a good one. If you have had the rental for years and years you will have to spend a fortune in repairs and maintanance and constantly doing the place up and painting to get market rates. Most landlords cannot afford to subsidise the tenants rent the way the sage does. Clearly the sage is in the minority here.Housing New Zealand does this and i have seen many new HNZ houses trashed by the kind of tenant it attracts. The landlord in this artical had for many years given the tenant very very cheap rent and now obviously cant afford to do it hence the large rise to bring it back to adverage rent.


Kenworthlogger

Posted on 29-11-2015 12:15 | By penguin

Sorry, but you are not comparing apples with apples. You are making a number of baseless assumptions. The main one is still that rentals need to keep pace with


Penguin

Posted on 29-11-2015 16:37 | By Kenworthlogger

Then if you can afford to have a rental rented out under market rent then way you go and do it. You might even make it in an artical like this one. Put your money where your mouth is!!


Kenworthlogger

Posted on 29-11-2015 21:51 | By penguin

That's twice you have suggested that two of us should 'put our money where our mouth is.' Somewhat illogical in this discussion. However, I guess we will beg to differ over the topic.


Penn & Teller

Posted on 30-11-2015 16:48 | By Taffy

This is becoming a joke. Give it up atleast Penn & Teller are funny as opposed to Pen & Truck


Rent increases

Posted on 17-12-2015 12:45 | By Crash test dummies

Well some bright spark official decides that all the warm fuzzes have to be paid for by landlords, so the rent increases. Some landlords cant be bothered with all that so just sell off the property means less available so demand is more than available and the price rises again. Add to all of that of course, the law is very one sided, so landlords just can not be bothered with it all. There you have it, the reasons for rents increasing.


Spot on JAFFA

Posted on 22-12-2015 08:17 | By Kenworthlogger

Have you noticed that not one person that has commented on this artical have given any praise to the landlord for keeping the rent low for the last two years. Clearly no one likes the landlord to ever win. Kiwis dont like tall poppies!


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