Landlords Advised to Negotiate Rents Amid Falling Market

Landlords in Wellington are facing increasing pressure to negotiate rental prices as market conditions shift, resulting in a notable decline in average rents across the region. According to recent data from realestate.co.nz, the average weekly rent has dropped by 8.4%, settling at $663 per week. This trend reflects a broader national average decrease of 2.4%, now at $626 weekly.

Housing policy expert Stuart Donovan, who works for Motu Research, recently experienced the changing rental landscape firsthand. After requesting a $50 reduction on the rent of his Island Bay property, he and his wife were disappointed when their landlord declined their request. They subsequently decided to move to a more affordable property in Berhampore, which is approximately 30% cheaper at $400 less per week.

Donovan’s experience underscores a significant shift in tenant dynamics. “We were a bit sad, so we thought we’d have a look at what was available,” he stated. The landlord is now advertising the Island Bay property at $1,100, which is lower than the previous rent. Donovan noted that if the landlord had been open to negotiation, they would have signed a new lease for two to three years, but now faces the costs associated with finding new tenants.

The overall rental market in Wellington has seen a dramatic increase in available properties, with rental listings rising nearly 20% year-on-year, totaling over 5,000 properties. The stock of rental properties in Wellington has surged by 91.5% compared to last year, highlighting a growing disparity between supply and demand. As more landlords list their properties at lower prices, tenants are gaining leverage in negotiations.

Despite these changes, some landlords remain resistant to adjustments. Donovan pointed out that many landlords may not be fully aware of the shifting market conditions. He remarked, “I think some landlords, if they are not paying attention, have got caught unawares.” This sentiment echoes the broader concerns in the rental market, where public service cuts and economic challenges have contributed to a demand shock.

In a recent statement, Sean Audain, Wellington City Council’s strategic planning manager, highlighted that the number of consented dwellings has increased by 79.5% in the year leading up to October 2025. This growth, along with a new district plan allowing for more housing, is expected to further influence rental dynamics in the region.

While landlords can raise rents annually under the Residential Tenancies Act, tenants have the option to request a rent reduction based on market conditions. Luke Somervell, president of Renters United, emphasized the importance of negotiation, stating, “It’s a tenancy agreement and open to negotiation between two parties.” However, he acknowledged the reluctance among tenants to approach their landlords for fear of backlash, especially as renters’ rights face erosion.

As the rental market continues to evolve, Donovan’s experience serves as a reminder for landlords to remain flexible and responsive to market trends. With increased competition for tenants, those who hesitate to negotiate may find themselves facing prolonged vacancies and financial loss.