Landlords Urged to Negotiate Rents as Market Conditions Shift

Housing policy expert Stuart Donovan has highlighted the shifting dynamics of the rental market in New Zealand, urging landlords to negotiate rents or risk losing tenants. Donovan, alongside his partner, faced a rent refusal from their landlord and subsequently decided to relocate after discovering a significantly cheaper option in Berhampore.

After moving from Brisbane to Island Bay a year ago, the couple enjoyed their home, which had a weekly rent of $1,250. However, upon renewing their tenancy, Donovan requested a modest reduction of $50, citing declining rents in Wellington. “It was weird to experience it first-hand,” he remarked. The landlord’s refusal prompted the couple to explore other options, ultimately leading them to a new property that was 30% cheaper—around $400 less per week.

By the end of the month, the couple will vacate their Island Bay residence, which has since been relisted at $1,100. Donovan expressed concern over the landlord’s lack of negotiation, stating, “They refused to negotiate and now have to re-let the place, which incurs costs.”

According to the latest figures from realestate.co.nz, the average weekly rent across New Zealand has decreased by 2.4% to $626 per week. Specifically, Wellington has experienced a more pronounced drop of 8.4%, bringing the average rent to $663. The number of available rentals has surged by nearly 20% year-on-year, with over 5,000 properties currently on the market.

The increase in rental stock has been particularly notable in Wellington, with a staggering 91.5% rise in available properties over the past year, totaling 925 rentals. Other regions have also seen significant stock increases, with total listings rising by 15.9% compared to December 2024.

Despite the overall decline in rental prices, some landlords have been caught off guard. Donovan remarked that the current economic climate, including public service cuts and a struggling economy, is leading to reduced demand. A new district plan aimed at increasing housing availability has further contributed to the changing landscape, with building consents rising significantly.

In a recent LinkedIn post, Sean Audain, strategic planning manager at Wellington City Council, noted a 79.5% increase in consented dwellings in the city over the year ending October 2025. “Regionally, Wellington is up 25%. While dwelling consents still have a way to go, the mix of locations and types shows promising signs of growth,” Audain stated.

Donovan pointed out that tenants often hesitate to request rent reductions, as there is a prevailing assumption that such negotiations are inappropriate. Under the Residential Tenancies Act, tenants can petition the Tenancy Tribunal to lower rents to align with market rates, provided they have supporting evidence.

Luke Somervell, president of Renters United, echoed Donovan’s sentiments, emphasizing the importance of negotiation in tenancy agreements. He noted that while fear of repercussions is common among renters, the current market conditions warrant discussions about rent adjustments. Many landlords, he suggested, are still holding onto inflated rent prices, despite the evident market corrections.

As the rental landscape continues to evolve, both tenants and landlords may need to adapt their strategies. The current surplus of rental properties offers tenants greater choice and potential leverage in negotiations, indicating that a proactive approach may benefit both parties in the long run.