Predictions for Tauranga Rental Prices For 2018

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A question we often get asked, by both tenants and landlords, is will rents rise in the coming year?  The simple answer is yes, they will.  Here are some of the reasons why:

As you would have read over summer, Tauranga, just like Auckland, has a serious rental shortage, especially quality rental homes. The shortage is a simple case of supply and demand.  Our region continues to attract record numbers of new ‘migrants’ to our suburbs, but due to lending restrictions, increasing mortgage rates, and a significant increase in house prices, it is difficult for many of these people to buy a home in Tauranga.  Therefore, many families moving here are looking for short or long term rentals.  Their search is made even more difficult because many existing tenants are choosing to stay in their rentals long term, knowing that quality rental properties are hard to come by.  So the usual demand for quality properties is exacerbated by increased migration and fewer home buyers, and this situation will unlikely change in the foreseeable future.  

Other factors leading to rents rising include lending restrictions on investors and the new Government changes around rental property compliance.  The Labour Government will also be cracking down on so-called ‘negative gearing’, where costs such as interest payments on a residential investment property can be used to offset tax owed on income from other sources.

Additionally, over the last few years there have also been extra costs for landlords such as rates and insurance increases,  and costs associated with drug testing of properties.  These factors, combined with more landlords exiting or choosing not to enter the market, means demand is high and supply is low, which leads to increasing rental prices.

Of course rising rents isn’t something new, the Trade Me Rent Price Index (a monthly analysis of the rental property market across NZ) shows that between December 2016 and December 2017 average rent rose 7.3%  in the Bay of Plenty.  However tenants shouldn’t be alarmed, as per our tenancy contracts, rent cannot be increased for 180 days from the start of the tenancy and a landlord is required to give 60 days notice of any increase in rent.  Usually rent increases for our tenants are small and gradual.

If you are a Landlord in this turbulent property market, we are happy to discuss your options for a long-term strategy.  Having the right plan and processes in place will to enable you to get through the next few years’ challenges and come out the other end in a stronger position. Remember, property investment is a long game and short-term losses or gains should form part of your overall long-term strategy.

For any other rental investment advice please phone us for a chat, we are happy to work through any questions you have and we offer free rental appraisals for landlords.

October 2017 Property Report From have released their October property report.  An interesting facts to note:

In October 2007 approx. 47,958 homes were available for sale in New Zealand. In 2017 ten years on, the total numbers of homes listed was only 24,307.

As has been discussed in many articles recently, the trend in New Zealand seems to be a move towards long-term renting rather than buying a home.  This trend of course is the ‘norm’ on many countries, especially in Europe, where families may rent a home for decades.

Here is the latest update, for the full report including graphs & maps please visit

In October 2007, some 47,958 homes were available for sale in New Zealand on, the country’s largest property listing site.

Ten years on, the total numbers of homes listed has slumped to 24,307 (October 2017).

“The property market historically follows a cyclic trend, and this past decade has seen a steady increase in asking prices while the total stock for sale continues to fall,” says spokesperson, Vanessa Taylor.

“This is inspiring many Kiwis to think outside the square when it comes to letting go of the quarter acre dream, and recreating the notion of what makes a home,” she says.

“In October 2007, we were months away from entering the period of the global financial crisis.

“New Zealand got hit, albeit relatively lightly, but it was a period when lending was tight, house values dropped and new housing construction fell dramatically.

“The GFC hangover meant it took years for the property market to recover. Recently, as more Kiwis started to return to New Zealand permanently, along with the number of migrants from other countries, New Zealand found itself behind the eight ball when it came to sufficient housing numbers,” says Vanessa Taylor.

“It’s only in the last three years that the fall in available property for sale has been quite so significant,” she says.

In October 2014, total housing stock sat at 39,917, compared to 24,307 in October 2017, almost a 40 per cent fall.

“But it doesn’t mean that home ownership is out of reach.

“There is more creative thinking coming into our housing vernacular, such as the Tiny House movement, co-housing* with a central hub, as well as apartment and duplex options.

“The exciting thing is that as we move through to the next property cycle, we will have more options to suit our lifestyles, much like other large metropolitan cities across the world,” says Vanessa.

New property listings in October 2017 down 8.4 per cent

Real-time statistics from show that new property listings were down 8.4 per cent in October compared with the same month in 2016, with 10,778 homes newly listed for sale across the country.

“This is not a surprise. We have had a challenging winter and that dominated decisions, because people always want to show their homes in the best light.

“When there’s rain, wind and cool temperatures, prospective buyers tend not to venture out as much” says Vanessa.

“We also had an election with property as a significant focus, so it’s no surprise people would wait to see the outcomes.”

Every region in the North Island experienced a fall in new listings, with the exception of the Hawkes Bay which was up by 3.6 per cent compared to October 2016.

Auckland, which by its sheer size can impact the overall market nationally, experienced a 9.3 per cent fall in new listings. The 3,705 new listings were minimal in a market of this size.

In the South Island, Nelson registered the highest number of new listings for October compared to the same month in 2016, with 235 new listings.

Stock levels impacted by unique Auckland situation

While stock levels have been falling nationally over the past 10 years, in October 2017 they were up 3.9 per cent compared to the same month in 2016.

While new listings in Auckland fell 9.3 per cent compared to October 2016, total housing stock on the market increased by just over 17 per cent over the same period.

“Essentially this tells us that homes are not selling quickly in Auckland and this has had an overall impact on the national market,” says Vanessa Taylor.

This is also reflected in Auckland’s property asking price, which has been largely static over the past year (i.e. between zero and one 1% change in asking price each month). The average Auckland region asking price in October 2017 is $937,922.

“Auckland home owners are being realistic and nationally it’s still a sellers’ market, but less so in both the Auckland and Canterbury regions,” she says.

Theoretically, if no new listings came onto the market in Auckland and Canterbury and all existing listings were to be sold, there would be no houses for sale in both regions in 21 weeks. This is close to the long term average for both cities.

By contrast, if no new listings came onto the market in Wellington and all existing listings were sold, the capital city would have no houses for sale within nine weeks.

*Note: – Co-housing involves family homes being built in clusters of up to 35, around shared living spaces, gardens and communal facilities.

Intensification is back for Tauranga Suburbs

Tauranga City Council have once again put intensification of existing neighbourhoods back on the council’s agenda.

The Council’s urban strategy manager explained to councillors that it is “about reshaping communities… and not just about the numbers.”

In developing a new Urban Strategy for the 2018-28 Long-Term Plan, council staff have been investigating how to get more housing into established suburbs, especially those close to the CBD.

Read more about the Council’s plans in this Bay of Plenty Times article – Intensification is back: What might it mean for your block?

Landlord Frequently Asked Questions

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New landlords and property investors come to us on a regular basis, both for advice about investing in Tauranga but also with questions about the services we provide and the fees associated with that service.  As a result of the many enquiries we receive we set up a Frequently Asked Questions page on our website.  Here is a summary of what we have included on our FAQ’s page:

What rent am I likely to achieve and how long does it take to secure a tenant?

We provide a free rent appraisal to determine a ‘market rent’ for your property. The average timeframe to secure tenants is 14-28 days.

How often do you carry out rent reviews and can I be consulted?

The Residential Tenancies Act allows for rents to be increased every 6 months as long as the tenancy agreement provides for an increase. Clients can have input into rent reviews.

Can you take over existing properties with existing tenants currently managed by other individuals or professionals?


Renovations, repairs and maintenance — should I spend money?

We use a variety of contractors who are reliable, consistent, and offer value for money. Clients can also stipulate a maintenance spending limit or choose to have no maintenance carried out without their approval.

Interior décor which optimises rent and saves money e.g. paint, curtains, carpet — what materials are best?

Paint: Use the same colour paint on all your properties, both inside and out. We recommend a colour like cream, does not date and it is not offensive to anyone.

Curtains: Choose quality neutral colour curtains also as these won’t clash with a tenant’s possessions, and neutrals tend to set rooms off better. Net curtains are important to tenants for privacy and security reasons, especially in bedrooms.

Carpet: Choose a darker coloured carpet for rental properties, as experience has shown that the pale colours show marks more, and are harder to clean over the long term.

Should I rent my property furnished or unfurnished?

Often furnished properties in the suburbs have less demand than unfurnished. Mount Maunganui apartments generally have stronger demand as furnished properties.

Do you have your own Tenancy Agreement?

Yes. Connect Realty’s Tenancy Agreement is the result of many years research into what works best for the landlord.

What type of tenancies do you offer?

We offer both Periodic and Fixed Term tenancies.

How much bond do you take and what happens to it?

We secure four weeks rent as bond. The bond is receipted by us and lodged with the Department of Building and Housing as soon as it is paid by tenants.

When and how do I get paid my rental income?

All rent is payable weekly, fortnightly by the tenant into our Trust Account. Licensed Agents must hold all monies held on behalf of other people into such a Trust Account (Note: Not all property managers are licensed!).

What do you do if the tenant gets behind in their rent or damages my property?

We have a zero rent arrears policy and rents are checked daily. If tenants miss payments we contact them to request any missed payments are remedied immediately. The appropriate legal written notices are served.

What records do you provide me with?

Monthly statement and interim statements if necessary, including a complete statement with all rents collected together with all disbursements, including any accounts paid on your behalf, (like rates, water, and any authorised repairs) plus the fees deducted.  It will also display the current tenants paid to date, the name of the tenant/s, and the property/ies. We can automatically send your accountant a copy.

Annual Statement: At the close of business for the year we send you an Annual Statement which summarises all the transactions of the financial year.

How frequently do you carry out inspections?

We complete an inspection at the beginning of a tenancy to record the details and condition of the property. When tenants vacate we carry out another called a “vacancy inspection” to again record the details and condition of the property. These inspections included in your management fees. We also complete routine maintenance inspections. We recommend that rental properties are inspected either quarterly (especially newer properties) or at least three monthly.

What do you do when tenants move out and there are damages?

If damages are identified then owners are informed ASAP. Sometimes the bond needs to be retained where the tenant has not left the property in a satisfactory condition or where there is damage which needs remedying.

For our full Frequently Asked Questions and Answers please see our Landlord FAQ page on our website.

Trade Me Property Investment Advice

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In case you weren’t aware, Trade Me provide regular market insights giving you both the latest real estate and rental statistics for New Zealand as well as property advice & news.  In one of the blogs on their site they provide simple tips on getting started in property investment.  A copy of the top 10 questions to ask yourself before investing is shown below, as well as a link to the full Trade Me blog:


10 questions to ask yourself before you start:

  1. Can you afford to buy it?
    Work out how much equity you already have, along with any savings, then talk to your bank, finance company or mortgage broker about how much you might be able to borrow for an investment property. Remember, the more you pay over valuation, the less total equity you’ll have across your properties, so ideally you’d be wanting to buy a property below or at valuation.
  2. Can you afford to rent it out?
    Work out how much rent you’ll need to cover interest, insurance and rates costs. Is it realistic for the area the property is in? If not, can you afford to top up the payments and count on capital gain to eventually make it worthwhile? Have a scout around Trade Me Property rentals to get a feel for the area you’re looking at.
  3. Can you cover the interest and renovation costs while you do it up?
    You might want to live in the property while you’re renovating. Can you afford to do this? And can you convince your lender that you can?
  4. How easy will it be to rent out?
    How’s the rental market performing in the property’s area? Trade Me’s Property Price Index provides a monthly analysis of rent prices being sought in listings across the country

    See what properties are already available to rent in the area and what rents are being asked.

  5. Can you cover any length of time when it’s not being rented?
    The reality of renting a property out is that unless you’re really lucky you won’t be fully rented every week. Set a buffer (say 48 weeks rented each year) and base your budgets around this.
  6. Are you buying it for the right reasons?
    Are you buying an investment property because you’d love to live there? Or are you basing it on the numbers? In saying that, you do need to ensure it is attractive to renters in one or more ways – this could be size of rooms, location or the look of the property.
  7. Can you add value?
    Look for ways you can easily add value to an investment property, such as landscaping, painting or upgrading a kitchen or bathroom.
  8. How comfortable are you with more debt?
    Although you’ll be earning rental income, your overall debt will be higher. Have a plan in case things go belly-up – you don’t want to lose your home if you’ve made a bad investment.
  9. Are you aware of tax implications?
    As with any investment, there may be tax implications to consider. Check with your accountant or financial advisor for advice on what you might be liable for.
  10. Does the gain outweigh the risk?
    Investment is all about weighing up risk vs potential gain. Do lots of research, talk to experts and make considered decisions and you’ll be in the best place to go forth and profit.

Read this article on the Trade Me website HERE

New Insulation Requirements For Rental Properties

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New legislation, introduced by the Government in July 2016, requires all residential rental properties in New Zealand to have insulation by July 2019.

The new Residential Tenancy Act regulations will require landlords to install insulation in accordance with the insulation standard NZS 4246.  There will be exemptions, such as where it is physically impractical to retrofit insulation due to limited space underfloor or inaccessible raked ceilings.

Landlords will also be required to provide an ‘Insulation statement’ on any tenancy agreement signed since July 2016.  This statement has to show location, type and condition of insulation in the rental home.  

To clarify, although landlords have until 1 July 2019 to bring all insulation to compliance, from 1 July 2016 ALL NEW tenancies entered into must include the state of the current insulation on the Tenancy Agreement  to help better inform tenants.

Connect Realty are currently in the process of checking the insulation of all our properties, starting with those homes coming up for tenancy renewal and working our way through our entire portfolio.

If you have any questions regarding the new legislation requirements, or if you want to check when we will be assessing your property, call us on 07 213 0826 or email


Please note: A ban on retrofitting or replacing foil insulation in residential properties came into force on 1 July 2016 to reduce safety risks associated with installing this product.  Anyone who breaches the ban commits an offence and may be liable to a penalty of up to $200,000.  

Do not touch foil insulation without turning off the power at the mains first as there is an electrocution risk. If you have any doubts, contact a qualified electrician.  If you choose to remove foil insulation, hire a qualified professional.  Anyone who inspects foil insulation even after turning off the power at the mains must proceed with caution as in some instances the foil may still be live.

Rental Property Insurance – What Cover You Need

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Property Insurance has been a hot topic in the news recently.  The conversation has mostly centred around flooding and meth related damage, but over the last few years we have also heard stories relating to earthquake damaged homes in New Zealand.  A report released by Treasury last year stated that 85% of New Zealand residential properties are under insured by up to 28%.

As property managers we can’t emphasis enough how important it is to have insurance for your rental property, and to make sure you have the right insurance.  In this blog we outline what we recommend to clients.

First you must take out a homeowners insurance policy, you then need to add ‘landlord extension’ cover.  While homeowner’s insurance covers owner-occupied homes, landlord’s insurance covers properties that are rented out.  This cover should insure your rental property against any damage, either accidental or otherwise. The Residential Tenancies Act 1986 requires you to pay the premiums charged for that insurance.

It pays to check exactly what your Landlord extension policy covers. Things to look for when shopping around for a landlords insurance policy include:

  • Property damage insurance
  • Liability protection
  • Loss of rental income
  • Guaranteed income insurance
  • Loss of rent caused by theft or malicious damage by tenants.

You may also choose to insure any chattels (such as furniture) that are listed in the tenancy agreement.  Note: any damage to them won’t be covered by the tenant’s contents insurance.  Also speak to your insurance company about their requirements for making claims on your rental property.

Clients of Connect Realty Ltd are able to access REAL Landlords Insurance.  REAL is one of New Zealand’s leading landlord insurance products currently on the market and the first specialist Landlord Insurance Policy provider. Their Landlord Preferred Policy was specifically designed to protect the interests of landlords and their investment properties.

REAL Insurance policies only cover landlords of residential rental properties that are managed by an approved Property Management Company, such as Connect Realty.  Their policy cover aims to complement your house insurance including:

  • Loss of rent (More than 97% of claims have been for loss of rent suffered by Landlords)
  • Intentional damage (your building insurance may not cover the entire loss caused by damage by the tenant)
  • Legal Liabilities, and more.

REAL offer a choice of three levels of cover (Traditional, Advantage, or Optimum), developed to protect your income and asset throughout the tenancy.  If you choose to use this cover your policy will be managed by us.

If you have any questions regarding landlord insurance please give Chris Jenkins a call on 0800 333 221

Why You Should Use A Property Manager

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Thanks to new legislation introduced over the last few years there has been increasing costs for landlords.  As a result, many landlords often wonder if they’re doing the right thing using the services of a Property Manager, and think they can save money by carrying out the service themselves.  However, we believe that one of the main reasons for using our services is because of all the new rules and legislation.  In fact, in New Zealand the use of property management firms is increasing due to the complexity of owning rental properties.

The Ministry of Business, Innovation and Employment (MBIE) recently published an article on the responsibilities of landlords – MBIE Article.  This is a very important article for landlords to read and is a great reminder that rental property ownership is the same as running a business, and like all businesses there are rules and regulations to adhere to.  Failure to comply with the rules may result in hefty fines.

In fact, landlords can be fined up to $4000 for failure to comply with the Residential Tenancies Amendment Act 2016.  Here are some examples

  • smoke alarms are now compulsory in your rental home and you must fit the right type in the right places,
  • all your new tenancy agreements must now include an insulation statement disclosing if there is insulation, where, what type and its condition – you must make all reasonable efforts to provide this information so tenants know what to expect,
  • you will need ceiling and underfloor insulation, where reasonably practicable, by July 2019, though some exclusions could apply.

One of our services is keeping our landlords informed about current and new legislation, and managing the process of compliance.  We use a variety of contractors who are reliable, consistent, and offer value for money. We also carry out regular inspections so items such as smoke alarms can be checked.

We also ensure our landlords are fully aware of their rights and responsibilities. We pride ourselves on managing quality homes to quality tenants, and we have Landlord Insurance available to help protect your investment.  We also have market leading software systems that deliver up to the minute reporting so you can have peace of mind that your investment is being looked after.

Our experience is that landlords are less likely to go it alone as soon as they read the new Tenancies Act and get a true taste of what’s required of them.  We believe that owning a rental property is not a passive investment and using the services of a property manager is the wisest move.


Tauranga Rental Properties

Here are our current Mount Maunganui  & Tauranga rental properties as of March 2017:

Central Mount Home

Recently redecorated in a super location close to beach and shops. 3 bedrooms – Master bedroom upstairs with a walk-in wardrobe and ensuite, and 2 bedrooms downstairs. The living area has a wood fire and the kitchen is near new. This home boasts great outdoor living with entertaining areas in a private back yard and a large single detached garage.

connect realty rental property

4+ Bedroom Welcome Bay Home

A great property in as new condition. Consists of 5 bedrooms or 4 plus office. 2 bathrooms. Open plan living with heatpump. Single garage and off street parking. Partially fenced. Would suit a family.

connect realty rental property manager welcome bay

Two Bedroom Unit in Greerton

Two bedroomed unit brick and tile. Pemberton Crescent is a very popular location, close to the Greerton shops and to public transport. This middle unit is neat and tidy with raked ceilings in the living and kitchen, making it stand out from the crowd. The gardens are easy care with a pleasant outside area for entertaining or sitting out to soak up the sun. You can benefit in the colder months from the sun room which leads off from the dining area. A single garage with internal access completes this desirable package.


connect realty property managers rental property march 2017




For more information visit our properties for rent page.

OUR CONDITIONS: All prospective tenants must fill-out an application form before they can view the property. Application forms can be found on our website . Click on Tenancy Applications Apply Online. PLEASE PHONE if you require the address to drive by the property (07) 213 0826. Under no circumstances must the property be entered. OUR COSTS: 4 weeks bond, 1 weeks rent, letting fee: 1 weeks rent plus GST. This must be paid prior to moving in.