Landlords Urged to Negotiate Rents as Market Dynamics Shift

Landlords in New Zealand are being advised to reconsider their rental prices amid a shifting housing market that shows a decline in demand and an increase in rental listings. Housing policy expert Stuart Donovan recently experienced this firsthand when he and his partner sought a rent reduction but chose to move after their landlord refused to negotiate.

Having relocated from Brisbane to Island Bay a year ago, Donovan and his wife enjoyed their rental home priced at $1,250 per week. However, upon attempting to renew their lease, Donovan requested a reduction of $50, citing a fall in rents across Wellington. The landlord declined, prompting the couple to explore other options. They ultimately found a new property in Berhampore for about $400 less per week.

Now, the Island Bay property has re-entered the rental market at $1,100 per week. “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,” Donovan explained, highlighting the financial implications for landlords who do not adapt to market conditions.

Data from realestate.co.nz indicates that the average weekly rent across New Zealand has dropped by 2.4% to $626, with Wellington seeing an even steeper decrease of 8.4% to $663 per week. The number of available rental properties has surged nearly 20% year-on-year, exceeding 5,000 listings.

As the rental market expands, Vanessa Williams from realestate.co.nz noted that more listings provide tenants with greater choice and potentially enhanced negotiating power. The increase in new rental listings climbed by 19.8% in December 2025 compared to the previous year.

While some landlords are proactively adjusting rents, others remain unaware of the market trends. Donovan pointed out that economic downturns and public service cuts are expected to affect demand in Wellington. Additionally, a new district plan allowing for increased housing development has led to a significant rise in building consents, highlighting the shifting landscape of rental properties.

According to statistics from Stats NZ, Wellington City approved 79.5% more dwelling consents in the year leading up to October 2025, contributing to the growing rental stock. Despite this increase, Donovan emphasized that many landlords might be caught off guard if they do not stay informed about market fluctuations.

The Residential Tenancies Act allows tenants to request rent adjustments, but many renters hesitate to negotiate due to fear of repercussions. Luke Somervell, president of Renters United, stated that tenants should feel empowered to ask for fair rents, as tenancy agreements are open to negotiation. He noted that while some landlords have inflated rental prices, there is little motivation for them to decrease rents while tenancies are ongoing.

As the rental market continues to evolve, both landlords and tenants must navigate these changing dynamics carefully. The experiences of tenants like Donovan serve as a reminder that open communication and negotiation may be key to achieving fair rental agreements in a market that is increasingly favoring renters.