Rising Auckland rental prices causing financial stress

Andy C. Saputra's rent has gone up 10 per cent in just over six months.
TOM CARNEGIE / FAIRFAX NZ.

Andy C. Saputra's rent has gone up 10 per cent in just over six months.

Auckland tenants are finding themselves under increasing financial stress as rent prices continue to rise, but one landlord says blame is being misdirected.

Andy C. Saputra moved into his Eden Terrace studio apartment in December 2015.

In April he found out that his rent will be going up by 10 per cent in July.

A budgeting expert says Aucklanders are getting in debt to cover rising rents.
BRUCE CLARKE / SUPPLIED

A budgeting expert says Aucklanders are getting in debt to cover rising rents.

He says his property manager, who works for Crockers Property Management, told him his rent would increase from $300 per week to $330 as that is the current market level for the area.

"I was shocked when I found my rent was going up.

"I was not expecting this because in the previous apartments I have lived in they have only been raised after a year," Saputra says.

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Saputra's 28 square metre studio room is is in a newly-built apartment complex.

"My rent excludes electricity and water costs. There is a dryer and washing machine I can use in a communal area for $4 a time," he says.

Saputra says he contacted the Ministry of Business, Innovation and Employment Tenancy Services about his rent increase.

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"I was told it was legal as under the Residential Tenancies Act 1986 a landlord can put rent up after 180 days."

With the rent increase, Saputra says he may start looking for cheaper apartments outside of inner-city Auckland.

"I do not own a car as right now I rely on public transport at Britomart. But it might be time to buy one and start looking at suburbs a bit further out," he says.

According to the Tenancy Services website the average rent for a one-bedroom unit in Eden Terrace is $400.

Studio apartment rent prices are not listed on the website.

Pam McKenzie, Auckland Central Budgeting Consultants' manager, says rent "is the biggest stress" for many of her clients.

"It now takes up so much of a person's wage.

"For instance if a person earns $1000 a week then three quarters of that may be going on rent.

"They find it difficult to live so then they get in debt to try make ends meet," she says.

McKenzie says she recently had a client who was paying $900 a week for a five-bedroom house in Mt Eden.

"She had three teenagers of her own and she had also taken on two foreign exchange students to try fill every room to cover rent," she says.

McKenzie says moving is not a viable option for a lot of Auckland city renters.

"I mean some can move, but then if you work in the city you have to factor in transport costs.

"A lot also have kids in schooling and do not want to move them," McKenzie says.

When Saputra found out his rent was increasing he went on the website neighbourly.co.nz to see if other tenants in his area had similar concerns.

"To my surprise there was already a post about another person in a similar situation."

Saputra commented on the post which had also drawn a reply from John Paynter who owns rental properties in Sandringham and Balmoral.

Paynter says his rental prices have increased an average of 2.7 per cent per annum while his rates have been compounding at more than 10 per cent per annum for the past three years.

He says property maintenance costs have also increased significantly over the 30 years that he has been a landlord.

"I depend on my rents and other investments to support my family. Many tenants have better cars, TVs and overseas trips compared to me.

"Being a landlord is very hard work. It is not unearned income, as many would have you believe.

"We are counsellors, property managers, repairmen, garden maintainers, accountants, researchers, investors and legal experts," Paynter says.

 - Stuff

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