After four months and more than 30 viewings, Grace Huia (21) and her 10-month-old son Eli have yet to secure a rental property in Dunedin. Photo: Peter McIntosh

Dunedin's rental market is in crisis as prospective tenants struggle to secure a home from a shrinking pool of increasingly expensive properties.

Tenants, support services, industry insiders and a politician contacted by the Otago Daily Times yesterday said a severe shortage of rental housing in the city, combined with rising rents, was leaving a growing number of residents locked out of suitable accommodation.

Single mother Grace Huia has been searching for a rental property in Dunedin for about four months. After upwards of 30 viewings, she has yet to secure a home.

Ms Huia and her 10-month-old son Eli live in a central city boarding house with two other people. Caring for her infant son in her room was far from ideal.

"He goes a bit stir crazy."

Most viewings she attended had at least five other families eager to secure the property. She was also on a waiting list for a Housing New Zealand home. Despite being told she was a priority, she had yet to secure a state house.

Real Estate Institute of New Zealand regional commentator and Nidd Realty director Liz Nidd said her company's stock of rental properties had never been lower.

The main issue was the reduced supply of rentals.

"We just can't get enough new stuff in."

The "threat of the Healthy Homes Bill", combined with the requirement for all rental properties to be insulated by July next year, had forced some Dunedin landlords to sell, she said.

The properties were snapped up by first-home buyers, further reducing the stock of rentals available in the city, she added.

The Healthy Homes legislation passed late last year will introduce new standards for rentals, including stricter heating and ventilation requirements, but the exact details of the new rules are still being finalised.

The new requirements under consideration were "so vast" there was every chance the rental shortage would get worse, Mrs Nidd said.

As the supply of properties in the city falls, rents are rising across the city. Figures show rents jumped 8.6% in Otago in the year to March; the majority of Dunedin suburbs experienced rent rises in the past year.

Rent hikes were biggest in Glenleith, Roslyn, Belleknowes, North Dunedin and Woodhaugh, which showed an annual rise of about 22% over the same period, according to QV figures.

Just six suburbs had decreasing rents, including Mosgiel, where rents fell 11.3% to a median of $290 per week.

Dunedin's rental housing crisis is also affecting support services.

Presbyterian Support Otago spokesman Warren Rosser said during February and March about one client per day had contacted their Family Works service for housing support, including 13 families.

Mr Rosser said the service was seeing an "ongoing trend" of people in Dunedin having to leave their rental accommodation after landlords decided not to renew leases.

"Getting into a rental house is becoming more difficult."

Dunedin South MP Clare Curran said the city's rental housing issues were not new, but unless immediate action was taken the problem would only get worse.

"The pressure is going to build because we've had a deficit of social housing for a long time.

"The city has to work out some temporary and medium-term solutions."

Ms Curran's South Dunedin electorate office is dealing with 15 cases of people struggling to find suitable accommodation.

The Ministry of Social Development's latest figures show that, as of December last year, 87 people in Dunedin were assessed as eligible for a state house and were waiting to find a property.

Sixty-four of those were "at risk", meaning they had "severe and persistent" need for housing.