Landlords Urged to Negotiate Rents as Market Conditions Shift

As the rental market in New Zealand faces significant changes, landlords are being encouraged to negotiate rents to retain tenants and avoid financial losses. This advice comes in the wake of a personal experience shared by housing policy expert Stuart Donovan, who recently navigated a frustrating rental situation in Wellington.

Donovan and his partner, who relocated from Brisbane to Island Bay a year ago, sought a reduction in their weekly rent of $1,250 when it came time to renew their lease. They requested a decrease of $50 in light of falling rent prices in the area. However, when their landlord refused, the couple decided to explore other options.

Shifting Rental Market Dynamics

In their search, Donovan discovered a property in Berhampore that was nearly 30% cheaper, priced at approximately $850 per week. After applying for the new rental, they informed their former landlord, who subsequently listed the Island Bay property for $1,100 per week. “We would have been looking at re-signing for two or three years,” Donovan stated. “They refused to negotiate and now have to re-let the place, incurring costs associated with that.”

Recent data from realestate.co.nz indicates that the average weekly rent across New Zealand has decreased by 2.4% to $626. In Wellington, the average rent has seen a more substantial drop of 8.4%, settling at $663 per week. The rental market continues to expand, with a year-on-year increase of nearly 20% in available properties, surpassing 5,000 listings.

Particularly notable is Wellington’s surge in rental stock, which has increased by 91.5% to 925 available rental properties. This trend reflects a broader national increase, with total stock levels rising by 15.9% since December 2024.

Challenges and Opportunities for Landlords

The rental landscape is evolving, and landlords who remain unaware of these changes may face challenges. Donovan remarked, “Demand is the main driver, and supply is starting to come on. We’re not expecting rents to take off, and I think some landlords have got caught unawares.”

In a recent post, Sean Audain, strategic planning manager for the Wellington City Council, shared that the number of consented dwellings in the city increased by 79.5% in the year leading up to October 2025. He noted that Wellington’s regional figures also reflected a 25% increase in new housing consents, signaling potential growth in the housing market.

Despite the declining rental prices, there remains a reluctance among tenants to negotiate rent reductions. According to Luke Somervell, president of Renters United, tenants often hesitate to ask for rent decreases due to fears related to their rights. “It’s a tenancy agreement and open to negotiation between two parties, but there’s not a culture of that,” Somervell explained. He emphasized that the Residential Tenancies Act allows tenants to request a review of rent prices to align them with current market conditions.

As the rental market transforms, those engaged in it—whether landlords or tenants—must adapt. With more properties available and falling rent prices, the balance of power appears to be shifting towards renters, who may find themselves with greater negotiating power in the months ahead.