Landlords Urged to Negotiate Rents as Demand Drops

As the rental market shifts, landlords are being advised to reconsider their pricing strategies or risk losing tenants and revenue. Housing policy expert Stuart Donovan recently experienced this firsthand when he and his partner sought a reduction in their rent for a property in Wellington but were denied. This decision led them to find a new home, which they secured at a significantly lower rate, highlighting the changing dynamics of the rental market.

Donovan and his wife, who moved from Brisbane a year ago, had been renting a property in Island Bay for $1,250 per week. Upon renewal, Donovan requested a rent reduction of $50, aware that Wellington’s rental prices had been falling. He noted, “It was weird to experience it first-hand. We asked if they could consider the rent in line with market conditions, but their answer was no.” Faced with this refusal, the couple began searching for alternatives.

Their search yielded a rental in Berhampore, priced about 30% lower at $400 less per week, which they quickly secured. The Island Bay property is now back on the market for $1,100, demonstrating the shift in tenant choices and market conditions. Donovan remarked, “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.”

Current data from realestate.co.nz shows a nationwide average weekly rent drop of 2.4%, now at $626 per week. In Wellington, the decline is more pronounced, with rents down 8.4% to $663 weekly. The number of rental properties available has surged nearly 20% year-on-year, surpassing 5,000 listings.

Wellington’s rental market has seen an astounding 91.5% increase in available properties, with 925 rentals currently on the market. This rise in stock is not isolated, as the total rental stock across the country has increased by 15.9% compared to December 2024. Notably, the Central Otago Lakes District remains the most expensive region to rent, with an average price reaching an all-time high of $891 per week in December 2025.

Vanessa Williams from realestate.co.nz emphasized that the increase in listings provides renters with more options and negotiating power. “The rental market continues to be awash with properties, with new listings increasing 19.8% in December 2025 compared to the previous year,” she stated.

In a contrasting situation, another couple in Wellington were unexpectedly informed by their landlord that their rent would be lowered “in line with market rentals,” despite not requesting a decrease. Donovan noted that the economic environment, coupled with public service cuts, has created a demand shock. Additionally, a new district plan allowing for more housing development has led to a rise in building consents.

According to Sean Audain, Wellington City Council’s strategic planning manager, the latest statistics indicate a 79.5% increase in consented dwellings in the year to October 2025, with the region overall up 25%. This increase in supply is expected to stabilize rental prices, with Donovan suggesting that some landlords may be caught unprepared if they do not take note of the changing market.

Under the Residential Tenancies Act, tenants have the right to request a rent adjustment to align with market values. While many renters may hesitate to approach landlords about potential rent reductions, Luke Somervell, president of Renters United, encourages tenants to negotiate. “It’s a tenancy agreement and open to negotiation between two parties,” he stated, despite acknowledging the fear many tenants feel, especially as renters’ rights face challenges.

With the rental landscape evolving, landlords are advised to remain attentive to market trends and tenant needs to avoid vacancy and financial loss.