A Whanganui resident says she and a group of tenants are facing homelessness after a significant increase in their rent.
Several tenants were under a 21-year fixed-term lease that expires in a few months, meaning their leases, which are paid on top of a weekly mortgage, have increased - with some spiking by more than $10,000 a year.
The land the tenants' properties sit on is owned by the company Poukawa Estate Ltd, which bought the leases from the district council several years ago. This means tenants have to pay for the land on top of the house they own.
Residents say they knew they were getting an increase but didn't expect it to be so much.
One resident, Paddy Avison, has lived in her Whanganui home since 1984. Her lease is increasing from $1620 to $11,600 a year, an increase her pension cannot afford.
"I'll have nothing left, nothing for petrol, nothing for food, power, gas, phone. I'm stuffed… What do I do, do I go bankrupt?" Avison said.
Avison believed the independent valuer, Morgans Property Advisors, had overvalued their land.
The properties used in the sale comparison seen by Newshub were all located by the beachfront. However, Avison's property is located behind the Wanganui Racecourse around a ten-minute drive from the beach.
She says the land has also been valued at a higher commercial rate rather than a residential rate, because the valuer claimed it is commercial because a company owns the land.
However, Avison said that was not right and went to a different valuer in town who said the rate should be at the residential amount of between 3-5 percent rather than the 6.25 percent Morgans valued.
"It's greed, just greed," she says.
Director and valuer of Morgans Property Advisors Ken Paulson said over the 21 years property values have risen expeditiously.
"Morgans Property Advisors is confident that the valuation process was scrupulous and that the new rates simply reflect the significant market increases since 2001," Paulson said.
But tenants don't agree, saying they only expected an increase of around $6000.
"Tenants are going to be out on their ear," Avison said.
She said she's been in contact with some of the tenants of properties affected by the increase.
Avison said there was a single parent whose lease would increase by $10,950 per annum in October.
She said another single parent's, that lives with her two babies and mother, lease is increasing by $13,159 in August.
She said a young family who bought one of the properties as their first home three years ago is seeing an increase of just under $8000.
"These people are homeless as of their due dates," Avison said.
"I was just about ready to throw the towel in.
"No one is going to buy my house from me with an $11,500 lease," she said.
The directors of Poukawa Estate Limited said they are sympathetic to the concerns raised by some tenants, but deny the increases are unfair. Tenants have been offered ways to reduce the impact, such as paying more frequently rather than a six-month lump sum, a shorter fix-term period to avoid a significant one-off increase, or a new lease arrangement.
"The rent increases are fair and representative of the massive increase in market values," the company said.
In March 2021, the Manawatū-Whanganui region's house prices hit a record high, among many other regions in New Zealand.
The region's prices were up 31.9 percent - which was over the national median increase of 24.3 percent.
