Landlords Urged to Negotiate Rents Amid Falling Market Rates

Landlords in New Zealand are being urged to engage in negotiations over rental prices as the housing market experiences a notable decline. According to housing policy expert Stuart Donovan, the current environment presents significant risks for landlords who fail to adjust their expectations in light of falling rents.

Donovan, who works as an economist for Motu Research, recently faced this reality himself. After requesting a rent reduction for his home in Island Bay, he was informed that his landlord would not consider the request. Consequently, Donovan and his partner decided to relocate, securing a new property in Berhampore at a rent that is approximately 30% lower, equating to about $400 less per week.

Their previous rental property, which was initially listed at $1,250 per week, is now back on the market at $1,100. Donovan highlighted the irony of the situation, stating, “We would have been looking at re-signing for two or three years. They refused to negotiate and now have to re-let the place, incurring costs in the process.”

The latest data from realestate.co.nz indicates that the average weekly rent across New Zealand has decreased by 2.4%, settling at $626 per week. In Wellington, the decline is even more pronounced, with rents falling 8.4% to an average of $663 per week. Notably, the availability of rental properties has surged, with listings increasing by almost 20% year-on-year, now exceeding 5,000 properties.

In Wellington, the stock of available rentals has seen a massive increase of 91.5% in the past year, amounting to 925 properties. This escalation in availability is coupled with a broader trend across New Zealand, where the total stock of rentals reached 7,577, marking a 15.9% increase compared to December 2024.

Central Otago Lakes District holds the title for the most expensive rental market, with average prices hitting an all-time high of $891 per week in December 2025, which is 11.8% higher than the previous year. The rising number of listings provides renters with more options and the potential for greater negotiating power, according to Vanessa Williams from realestate.co.nz. She noted that new rental listings surged by 19.8% in December 2025, compared to the same month in 2024.

As the rental landscape shifts, some landlords are already adjusting their strategies. One Wellington couple reported being surprised when their landlord unexpectedly lowered their rent “in line with market rentals,” despite not having requested a decrease. Donovan explained that the market is currently experiencing a “demand shock,” attributed to public service cuts and an underperforming economy. Additionally, a new district plan that has been in effect for 18 months has resulted in a significant increase in building consents.

According to Sean Audain, strategic planning manager for the Wellington City Council, there has been a 79.5% increase in consented dwellings in Wellington City over the year ending October 2025. “Regionally, Wellington is up 25%,” he noted, indicating a promising trend for future housing supply.

Donovan also pointed out that many tenants operate under the assumption that they should not request rent reductions, fearing potential repercussions. Under the Residential Tenancies Act, tenants can formally request a rent adjustment through the Tenancy Tribunal, provided they can present evidence justifying the request.

The president of Renters United, Luke Somervell, emphasized the importance of negotiation, stating, “It’s a tenancy agreement and open to negotiation between two parties.” He acknowledged that fear among tenants is justified, particularly as their rights have been rolled back in recent years.

Despite reports of rent reductions occurring, Somervell noted that there is little incentive for landlords to lower rents while a tenancy is in place. As the rental market continues to evolve, both landlords and tenants may need to reassess their strategies to navigate the changing landscape effectively.