The Property Institute says the "slow trainwreck" of rising rental prices is due to a lack of supply that can only be solved by property investors - and that the government is wrong to be pushing them out of the market.
Chief executive Ashley Church, speaking this morning on TVNZ 1's Breakfast, said there is "no doubt" rents have risen over the past year.
"We know there's pressure on housing stock and we know that's caused by migration and more recently those high LVRs, which have scared some people out of the market, or made it impossible for investors to get into the market," Mr Church said.
"We know anecdotally that rental listings are falling - that there are fewer rentals actually coming on to the market.
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"We know from the Property Institute Velocity Market Insights Report that rents are increasing - up 4.5 per cent across the country for one-two bedroom units, 4.2 per cent for two-three units.
"In Hamilton there's been a 9.2 per cent increase for one-two bedroom units, In Dunedin there's been a 14.6 per cent increase in two-four bedroom units and if you're in Christchurch and you want a unit over five bedrooms, there's been a 6.8 per cent increase - so big numbers."
Mr Church said the lack of units in the market will undoubtedly increase the price of rentals, unless the government recognises that private investors hold the key to solving the problem.
"Phil Twyford, to be fair to him, he's building more units as fast as he possibly can, but on the other side of the equation we've got Grant Robertson doing the exact opposite.
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"He's basically saying 'we're going to punish those nasty property investors, we're going to do whatever we can to actually get them out of the market, because they're a blight on the market."
Mr Church called efforts to remove investors from the market "absolute insanity".
"Ring-fencing tax losses ... potentially introducing capital gains taxes - those things are going to have exactly the opposite effect to what the market needs right now - it's insane," Mr Church said.
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"They need to do in the economic policy space what Phil Twyford is doing in the infrastructure space ... Twyford's building more units, that's fantastic, but we need to be ... doing things that are going to encourage people to invest in property."
Mr Church said it was time to "abandon envy-fueled attacks on property investors", and that "they're actually part of the solution".
"[We should be] doing everything possible to get the private sector actually building rentals ... that's the solution to the problem - not attacking them and treating them as if they're part of some major problem that needs to be solved."
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