Dunedin flats are being snapped up by first-home buyers, amid concerns from landlords it will be too costly to meet the Government's new housing requirements.

Trade Me said yesterday the weekly rent for flats across the city for next year had risen by 6.3% to $361.50, and the number of rental listings for the month of June was 14% lower than in June 2017.

Real Estate Institute New Zealand regional spokeswoman Liz Nidd said due to the requirements of the Healthy Homes Guarantees Act - which comes into force next July - ``mum and dad'' investors across the city were questioning whether investing in housing was worth their while.

The phenomenon was ``enough for us to feel that it was having a significant effect on the rental market'', she said.

Rentals on the fringes of the student area, for instance in Northeast Valley, were being picked up by first-home buyers, Mrs Nidd said.

``There are some investors who have decided `Oh, it's just got too hard. I'll sell'.''

The housing market in Dunedin was strong, Mrs Nidd said, and about 90% of the time first-home buyers were willing to pay more than investors were, including investors in student accommodation.

Trade Me property head Neil Jeffries said the figures provided were for the whole city.

However, he predicted it would be harder specifically for student tenants to find flats.

In other areas - such as Wellington or Auckland - student housing stock was on average slightly better, but Dunedin had a ``plethora'' of old houses.

Under the new Act, rental properties will have to have a form of heating or they will have to be fully insulated.

Other standards relating to ventilation and drainage will also be introduced.

The requirements will have to be implemented in all flats by 2024.

A University of Otago spokeswoman said there were no concerns about flat availability for 2019.

Otago Property Investors Association president Cliff Seque agreed some first-home buyers were picking up properties around the student area, but said landlords were also renting more houses to families and he thought tenants could be staying longer.

There were other reasons why rent in the city could be going up.

It was ``early days'' for landlords to be concerned about the new Act, since it appeared they had several years to implement the changes.

Not all landlords chose to advertise to students on Trade Me, with some preferring social media or their own websites, he said.


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