Todd & Co property manager Berny Kisa said the rental market was a bit crazy at the moment.
"A lot of tenants are looking for properties but there is an absolute shortage,” she said.
Property Brokers general manager David Faulkner said demand outweighed supply and the shortage was due to various factors including net migration and rental price increases.
"If you look at rental prices across provincial New Zealand, rentals have gone up double-digits and Invercargill is no different," he said.
In Southland, the median rental as of December 2023 was $430 a week, according to figures provided by Tenancy Services.
It is the second lowest in New Zealand after the West Coast.
Tenants looking for rentals were "a mixed bag of people from all walks of life".
“Families wanting to get on the property ladder want rentals so they can save up to buy their own homes but they end up renting longer because of accommodation costs,” Ms Kisa said.
The Invercargill City Council said this week it had 216 housing units and the current waiting list was 91, with demand strong.
The units have an occupancy rate of 96% — the 4% unoccupied is temporary and relates to units being refurbished between tenancies.
Families, students, out-of-towners, new migrants, retirees and elderly couples are just some of the people clamouring for rentals.
“I do get three or four emails and texts or calls a week from people from out of Invercargill, from the South Island and the North Island who want to secure a home before they move down,” Ms Kisa said.
Mr Faulkner had started to see more interest from property investors because deductibility rulings had changed.
"Landlords can offset the interest against income and that will see more investors and more people choose to become landlords, which is good because that means there will be more rentals, but the negative part is that it makes it harder for first-home buyers."
Rental costs in Southland might seem less than big cities but the cost of living for most people tended to be the same. Food, bills and health costs all contributed to "a lot of people struggling at the moment".
The most popular type of property renters wanted were three-bedroom homes because these suited families or students living together.
Ms Kisa said the rental market had proven to be a problem for both renters and property owners despite Southland’s cheaper prices.
A Trade Me report indicated 70% of people competing for Invercargill rental properties were under 40.
By Nina Tapu
