High demand for rentals is allowing landlords to pass on rising costs to tenants, an economist says.
NZIER principal economist Christina Leung told The AM Show the basic reason rents have gone up is supply and demand.
"Demand for rental properties is stronger than the supply, it's a very tight market so landlords are more able to pass on the rising cost to tenants in the form of rising rents," she said.
"If you look at, for example, insurance premiums, that's gone up quite a bit over the past year and if you look at where it's affected living costs for superannuitants that's come through directly in the form of higher insurance premiums," Leung says.
But, beneficiaries who tend to be more likely to be renters, will face higher rents, she explains.
Landlords pass these costs on.
Stats NZ figures released on Thursday found rents have risen 2.9 percent this year for beneficiary households.
Consumer prices manager Gael Price also put the rise down to landlords passing on costs - - like ballooning insurance premiums - on to tenants.
It's putting a lot of pressure on beneficiaries in rented housing, who Price said devote approximately a third of their overall expenditure on rent.
Leung wasn't sure new regulation preventing landlords from putting the rent up more than once a year would help the situation.
"Regardless of the frequency, it's still how much they're able to put up, it still comes back to demand and supply."