Rents are rising in almost every city, according to a new property management survey, and many people who have to rent are struggling to find a place to live.
First National Real Estate's quarterly survey measures vacancy rates, rent rate movement, and supply and demand among property managers in its group.
First National general manager Colleen Milne said the shortage of property and rise in rent was due to a lack of investment and construction of new homes, which she blamed on the cost.
Although home building had picked up in some areas recently, it has tended to be for owner-occupiers rather than investors, the survey showed.
"Rent prices continue to increase across the country, particularly in Auckland and Christchurch," Milne said.
"The lack of affordability for first-home buyers with families may result in many families being unable to climb out of the rental cycle into home ownership."
Across New Zealand, almost half of First National property management offices said rents were higher than they were a year ago. Families were the most active demographic searching for a rental property, followed by young professionals, the survey showed.
But Quinovic Property Management Viaduct manager David Graham said that although demand for rental properties during the summer was high and rents went up, winter had brought lowered demand and, as a result, lower prices.
"There is some demand, but it really depends on the size and quality of the house."
Crockers Property marketing manager Kim Sinclair said some properties were sitting empty.
"People are being a lot choosier about where they rent," she said.
The landlords she had spoken to said they would not be raising rent any higher than necessary to cover rates increases, because they had good tenants they would not want to lose.
Auckland was the most expensive place to rent, according to the First National survey. Studio apartments averaged $225 a week and three and four-bedroom houses $402 and $468.
Department of Building and Housing figures for December 1, 2011, till May 31 show the average rent in New Zealand for a three-bedroom house is $350. The same type of property in Auckland suburbs such as St Lukes, Mt Eden and Three Kings costs an average rent of more than $500.
The areas of the country with more affordable rent often had limited work opportunities, which meant people spent more time commuting, said Milne.
Taranaki had the lowest average rent in the survey for a three bedroom house, at $266 per week.
Christchurch rent prices have increased more than 11 per cent since May 2011, as a result of the earthquakes and the slow pace of rebuilding, DBH information shows.
The department report showed Wellington rents averaged $404 in May this year, almost unchanged from April, but up 5.9 per cent on May last year. Wellington rents were expected to flatten in coming months.