Landlords Advised to Negotiate Rents as Market Conditions Shift

Landlords in New Zealand are being urged to reconsider their rental pricing strategies in light of changing market conditions. Recent experiences from tenants highlight the risks of maintaining higher rents as demand falls and competition increases. For instance, housing policy expert Stuart Donovan and his partner are relocating after their request for a rent reduction was denied.

Donovan and his wife had been renting a property in Island Bay for $1,250 per week. When it came time to renew their lease, Donovan requested a modest reduction of $50, noting the declining rental market in Wellington. “We said would you be able to consider the rent in line with market conditions but their answer was no,” he explained. Facing an unsatisfactory situation, they decided to explore other options and found a more affordable rental in Berhampore at a rate of about $400 less per week.

The average rental prices across New Zealand reflect a broader trend, with the latest data from realestate.co.nz indicating a national decrease of 2.4% in average weekly rents, now sitting at $626. In Wellington specifically, rents have fallen by 8.4% to approximately $663 per week. The number of available rental properties has surged nearly 20% year-on-year, exceeding 5,000 listings.

Wellington’s rental market has seen a staggering 91.5% increase in available properties over the past year, with 925 listings currently on the market. This increase in housing stock is significant, as it provides tenants with greater choices and negotiating power. Central Otago Lakes District remains the most expensive area to rent, with an average weekly price of $891, a jump of 11.8% compared to December 2024.

Vanessa Williams, a spokesperson for realestate.co.nz, noted that the influx of rental listings could lead to further negotiations, as landlords may need to adjust their expectations to retain tenants. “The rental market continues to be awash with properties with the number of new rental listings increasing 19.8% in December 2025 compared to the previous year,” she said.

Interestingly, some landlords are also adapting to market trends proactively. A couple in Wellington was surprised when their landlord voluntarily reduced their rent to align with market conditions, despite not having requested a decrease. This reflects a growing awareness among landlords that maintaining higher rents may result in longer vacancy periods and increased turnover costs.

According to Donovan, the current economic climate suggests that demand may not rise significantly in the near future due to public sector cuts and overall economic challenges. “Demand is the main driver and supply is starting to come on. We’re not expecting rents to take off,” he said.

Wellington City Council’s strategic planning manager, Sean Audain, reported a remarkable 79.5% increase in consented dwellings in the city over the year leading up to October 2025. This increase reflects the implementation of new district plans aimed at expanding housing availability, which is expected to further affect rental prices.

Despite these market shifts, there remains a hesitancy among tenants to negotiate rent decreases, stemming from a cultural perception that such discussions are discouraged. Under the Residential Tenancies Act, tenants have the right to request a rent adjustment through the Tenancy Tribunal, provided they can substantiate their claims with relevant market data.

President of Renters United, Luke Somervell, emphasized the importance of negotiation in tenancy agreements. “It’s a tenancy agreement and open to negotiation between two parties, but there’s not a culture of that,” he stated. He acknowledged that while fear of repercussions exists, it is essential for tenants to advocate for fair rents, particularly in a market where some rents have become excessively inflated.

As the rental landscape continues to evolve, both landlords and tenants must navigate these changes thoughtfully to ensure mutual benefit and sustainability in the housing market.