Rental prices are predicted to increase up to 20 per cent more than they usually would during the busy months of 2018.

Wellington could be staring down the barrel of the worst rental crisis in the city's history, property experts say.

Record rent increases are forecast to hit the capital during early-2018, fuelled by predicted growth in government staff working in the CBD, more students attracted by a year's free tertiary education, and sustained falls in available rentals.

Compounding the issue is early indications of a rental property sell-off. Ray White business development manager Gareth Robins said he had noticed a surge in multi-unit and multi-flat properties appearing on the market.

MAARTEN HOLL/STUFF Rental prices are predicted to increase up to 20 per cent more than it usually would during the busy months of 2018.

It was too early to tell if the sell-off would continue. But with most investors believing property prices had peaked and new costs on the horizon coming from the Government's Healthy Homes Guarantee Bill, Robbins said the stage was set for such an event.

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"People who have been holding those properties as their retirement plan, for example, see this as a good opportunity to cash in."

SUPPLIED Trade Me Property head Nigel Jeffries said the rental market had "gone a bit crazy this year".

Trade Me's October Rental Property Index showed 69 per cent fewer rental properties were listed in the Wellington region compared to the same time last year, a trend that has been worsening throughout the year.

Trade Me Property head Nigel ​Jeffries said less rental stock hitting the market and a slowdown in the creation of new stock could push rent increases in Wellington city up 20 per cent higher than would usually be during the busy seasons of January, February and March.

"The choices renters are going to have in January and February are expected to be significantly lower than 2017."

MAARTEN HOLL/STUFF Wellington Property Investors' Association president Richard Bacon said an increased number of rentals had appeared on the market for sale.

The capital had never faced a comparable shortage in the decade since Trade Me started recording data on the housing market, Jeffries said.

"These total stock levels are absolutely outside the long run average, and we haven't seen them this low before."

Wellington Property Investors' Association president Richard Bacon said the rollout of new standards under the Healthy Homes Guarantee Bill were months or even years away. But the direction had been set, and many landlords may decide to sell their investment properties.

GRANT MATTHEW/STUFF Education Minister Chris Hipkins said officials were working on the details of how policies for a year of free tertiary education would be implemented.

"It's more the story of the increasing compliance demands than the reality," he said.

Having a Labour-led government in charge would likely mean the size of Government ministries grew, meaning more workers in the CBD, Bacon said.

This was good news for landlords, who could increase rent, particularly in the family home market.

JAMES GRIFFIN/EDGELINE PHOTOGRAPHY Victoria University of Wellington Students' Association president Rory Lenihan-Ikin said students were having to take on increased hours of work outside studies to cover bills.

The Government's plans to instigate a year's free tertiary education was expected to draw more students, with Education Minister Chris Hipkins predicting a 15 per cent increase in numbers nationally.

"It's too early to tell what the policy's effects on actual student numbers will be at any specific provider or city," Hipkins said.

"The fees-free policy will boost demand for tertiary study over time. However, this does take into account the current situation that student numbers across the tertiary education system were otherwise forecast to decline slightly over the next four years."

It is unlikely any increase will be accommodated in university halls, with Victoria University, Massey, WelTec and Whitireia all reporting the majority were already booked out for the 2018 academic year.

In order to accommodate the increased demand, Victoria University will have an extra 240 beds available for 2018, making a total of 3474 beds.

The reopening of Boulcott Hall, which had been closed since February for refurbishment, would provide 180 of these, while 60 would be added at 222 Willis St.

Victoria University of Wellington Student Association president Rory Lenihan-Ikin said a Government policy to increase student livings costs by $50 a week would be cannibalised by the increased price of accommodation.

"When I first got a flat in 2013 I was paying $150 and that was very normal. Now the average in the student suburbs in Wellington is $218, according to the most recent data we've had."

SIX REASONS 2018 COULD BE RENTERS' YEAR OF HELL

1. Potential cost increases due to regulatory demand could reduce investment in rentals

2. Potential tax changes to rental properties, including capital gains, could put off investors

3. Possible Government staff growth could increase demand

4. Credit restrictions on investor could reduce purchase of rentals

5. First-home buyers' inability to save a 20 per cent deposit stops transitions from rental to ownership

6. Affordability of new homes