Landlords Face Pressure to Negotiate Rents as Market Shifts

Housing policy expert Stuart Donovan recently experienced the shifting rental market firsthand when he and his partner sought a rent reduction. After their landlord rejected their request, they decided to move, leading to the property being re-listed at a lower price. This incident highlights a growing trend among landlords who may need to reconsider their rental prices or risk losing tenants.

Donovan and his wife had been renting a property in Island Bay, Wellington, for $1,250 per week. After a year in the home, they requested a reduction of $50 per week based on market conditions. Despite evidence that rents in the area were declining, their landlord refused to negotiate. “It was weird to experience it first-hand,” Donovan commented. After exploring other options, the couple found a new rental in Berhampore at a significantly lower rate, approximately $400 less per week.

The latest data from realestate.co.nz reveals that the average weekly rent in New Zealand has decreased by 2.4% to $626. In Wellington, rents have dropped 8.4% to $663 per week, contributing to a nearly 20% year-on-year increase in the number of available rental properties. As of December 2025, Wellington recorded a staggering 91.5% increase in rental stock, with 925 available properties.

With many landlords facing an oversupply of rental properties, it has become increasingly necessary for them to negotiate rental terms. Vanessa Williams of realestate.co.nz noted that the growing number of listings provides renters with more choices and strengthens their negotiating power. The rental market saw a 19.8% increase in new listings in December 2025 compared to the previous year, reaching 5,349.

In a surprising turn, some landlords are proactively lowering rents. One couple in Wellington received a rent reduction from their landlord without requesting it, demonstrating a shift in the rental landscape. Donovan explained that the local economy’s struggles and public service cuts are contributing to a decrease in demand for rental properties, further pressuring landlords to adjust their rates.

The Wellington City Council’s strategic planning manager, Sean Audain, reported that consented dwellings in Wellington have increased by 79.5% in the year leading up to October 2025. This significant rise in building consents indicates a growing supply of housing, which is expected to stabilize rental prices in the long term.

Despite these market changes, many tenants remain hesitant to negotiate their rents. Luke Somervell, president of Renters United, pointed out that there is often a culture of fear surrounding rent negotiations. He emphasized that tenants should feel empowered to discuss rental agreements, as they are open to negotiation. The Residential Tenancies Act allows tenants to request a rent reduction based on market conditions, although they must provide supporting information to justify their request.

As the rental market continues to evolve, landlords who fail to adapt may find themselves facing increased vacancies and associated costs. The experience of Donovan and others underscores the importance of communication and negotiation in today’s rental landscape. With the market showing signs of change, it may be wise for landlords to consider the benefits of negotiating rents to retain tenants and ensure financial stability.