Rents in Masterton have risen by nearly 12 per cent in the past year, one of the biggest hikes in the country.
The town’s average rent is now $302 a week – an 11.9 per cent rise in one year, according to figures published on Monday.
NZ Property Investors’ Federation figures showed that average rent was $270 a week in April last year, and the year before, $252.
Overall, New Zealand rental prices had an increase of 4.4 per cent, in the year up to $433 a week.
Auckland City had a 2.5 per cent increase to an average weekly rent of $555, but the greater Wellington area had the largest rent increases, rising 16.3 per cent in Porirua to $409 a week, and Upper Hutt up 8.3 per cent to $362.
Wellington City’s five per cent increase took average rents to $507.
Wairarapa Property Investors Association acting president Tim Horsbrugh said the large increase “was just the tip of the iceberg”.
For many years, the town’s rent prices remained low due to plenty of supply.
Trust House also kept the town’s rents low, offering cheaper rent for families, he said.
In November last year, the Times-Age reported the trust charged $246 for a three-bedroom home.
“But Trust House houses are chokka because more and more people are coming in, and now Wairarapa has started to catch up with market prices which for many years have been low,” Mr Horsbrugh said.
It was a concern, but rents were only going to get higher, Mr Horsbrugh said.
While Masterton’s average per week was $302, Mr Horsbrugh said it was one of the cheapest in the country.
“It is purely a supply and demand situation – we need more rental properties.”
The Government was making it harder and harder for private sector property investors to build houses, especially for the lower socio-economic families, he said.
More regulations being thrown at property owners and investors, which was not encouraging them to build.
Mr Horsbrugh said there needed to be a policy where the Government financially supported new builds in the private sector that would house those in the lower socio-economic band.
“That’s why right now, even in Masterton, there are certain groups of people who will struggle to find a house [to rent] because they may have a bad credit history.
“I feel sorry for them.”