Stats NZ this week said rising rent prices were the biggest contributor to the annual inflation rate and almost 20% of the 2.2% annual increase in the consumer price index (CPI) was due to rent prices.
NZ Property Investors Federation spokesman Matt Ball said rates alone made up 16% of the overall 2.2% increase.
"Don’t forget that rates are a very important contributor into rent," Mr Ball said.
"It’s one of the costs, one of the big costs that landlords and property investors face."
He said insurance costs had increased 12.9%, "another big chunk of inflation", and were a big chunk of what made up rents as well.
Another factor in rents was the increasing cost of repairs and maintenance.
"The last few years have been difficult for residential rental providers.
"Interest costs, council rates, insurance and maintenance have all increased significantly, driving some investors out of the sector, reducing the supply of rentals and pushing up rents.
"Interest rates are starting to come down, but the benefit of that won’t be felt till 2025 when investors start to come off fixed interest rates.
"In the meantime, costs like insurance and rates continue to climb relentlessly.
"Dunedin’s rates are up 36% since 2019, with another 17.5% increase due this year — 19.4% for residential properties."
Landlords had done a "great job" of absorbing most of the increasing costs and shielding their tenants from the worst of the impact by increasing rents only 4.5% over the past year, he said.
Ministry of Business, Innovation and Employment data shows median rent in Dunedin increased from $640 per week on January 1, last year, to $680 a week on January 1 this year.
Otago Housing Alliance leader and Cosy Homes Trust chairman Aaron Hawkins said market rents were too high for too many people.
Further, proposed changes to the Residential Tenancies Act about how tenancies could be ended would tip the balance of power between tenants and landlords even more in landlords’ favour, Mr Hawkins said.
The amendments to the Act aimed at repealing changes made in 2020 could be voted through towards the end of this year.
And, specifically, the reintroduction of 90-day "no cause" terminations for periodic tenancies — meaning landlords would not need a specific reason to end a tenancy — was an example of the imbalance, Mr Hawkins said.
"Everyone deserves to live in a house that doesn’t make them sick.
"That includes close to a third of New Zealand households who are now renting," Mr Hawkins said.
"The Healthy Homes regulations were a step in the right direction, but didn’t solve the problem.
"It’s also impossible to tell how many flats are meeting the standards because the government doesn’t track that data, but we know it’s lower than it should be.
"Putting so much of the compliance burden on tenants, by navigating the Tenancy Tribunal process, means we’ll probably never know."
There was no better example of the power imbalance between renters and their landlords than the landlord lobby telling its members, and by extension future tenants, that "bidding wars for flats are still fair game".
"Market rents are already too expensive for too many people.
"The best thing the government can do is to help build more public housing, rather than walking off the job as they’re doing right across Dunedin," he said.
The New Zealand Property Investors’ Federation this week published advice on rental bidding.
But Mr Ball said Mr Hawkins appeared to have "deliberately misinterpreted our efforts to ensure landlords don’t encourage bidding wars and do comply with the law".
He said the rules around rental bidding wars in New Zealand did cause confusion "and can catch people out".
"We are doing our best to ensure our members understand the law and don’t fall foul of it."
