Landlords Urged to Negotiate Rents as Demand Drops Significantly

Housing policy expert Stuart Donovan has highlighted a pressing issue for landlords as they face declining tenant demand and rental prices. Donovan and his partner recently sought a rent reduction on their property in Wellington, only to be told “no” by their landlord. Consequently, they have decided to move to a new home where the rent is significantly lower.

The couple initially rented a property in Island Bay for $1,250 per week, but after requesting a $50 reduction, the landlord refused. This refusal prompted the couple to explore other options, leading them to a listing in Berhampore that was 30% cheaper, amounting to a savings of almost $400 weekly. Donovan expressed his surprise at experiencing the market dynamics first-hand, stating, “We asked if they could consider the rent in line with market conditions, but their answer was no.”

Currently, the Island Bay property is being advertised for $1,100 per week, reflecting the shifting rental market. According to data from realestate.co.nz, the average weekly rent across New Zealand has decreased by 2.4% to $626. In Wellington, rents have plummeted by 8.4%, now averaging $663 per week. The total number of rental properties available in the country has surged nearly 20% year-on-year, surpassing 5,000 listings.

The increase in rental stock is particularly notable in Wellington, which has seen an astonishing 91.5% rise in available properties compared to the previous year. This increase is coupled with a broader trend of rising inventory across various regions, with total rental stock up by 15.9% from December 2024.

In contrast, the Central Otago Lakes District remains the priciest area for rentals, with the average price reaching an all-time high of $891 per week in December 2025, reflecting an 11.8% increase from the previous year.

Vanessa Williams, a spokesperson for realestate.co.nz, noted that the surge in listings is shifting power towards renters, giving them greater negotiating leverage. “The rental market continues to be awash with properties, with new listings increasing by 19.8% in December 2025 compared to December 2024,” Williams stated.

While some landlords have proactively reduced rents, others remain resistant. Donovan explained that the rental landscape is changing due to various factors, including public service cuts and a sluggish economy. A new district plan that encourages housing development has also contributed to the current situation, as building consents have risen significantly over the past year.

In a recent LinkedIn post, Sean Audain, Wellington City Council’s strategic planning manager, highlighted that the number of consented dwellings in Wellington City surged by 79.5% in the year to October 2025. “Regionally, Wellington is up 25%. While dwelling consents still have a way to go, there are promising signs of growth,” Audain noted.

Despite these developments, many tenants remain hesitant to negotiate rent decreases, often operating under the assumption that such requests are unwelcome. Under the Residential Tenancies Act, tenants can seek a review by the Tenancy Tribunal to ensure their rent aligns with market rates, although they must provide supporting information to validate their claims.

Luke Somervell, president of Renters United, emphasized the importance of negotiation in tenancy agreements. “It’s a tenancy agreement and open to negotiation between two parties,” he stated. Yet, he acknowledged that many renters may fear approaching landlords, especially in light of recent rollbacks in renters’ rights.

The current rental market conditions serve as a crucial reminder for landlords to remain vigilant and adaptable. As more properties become available and tenants seek better financial terms, those who neglect to negotiate may find themselves facing increased vacancies and associated costs.