Landlords Urged to Negotiate Rents as Market Conditions Shift

Landlords in New Zealand are facing increasing pressure to negotiate rents as the housing market experiences significant shifts. With rising vacancies and falling rental prices, tenants are more likely to seek better deals, and those who do not adapt may find themselves losing both tenants and income.

Housing policy expert Stuart Donovan recently experienced the market’s changes firsthand. After requesting a modest rent reduction of $50 for his Island Bay home, he was turned down by his landlord. As a result, Donovan and his partner decided to move to a new property in Berhampore, which they secured at a significantly lower rate—about $400 less per week than their previous rent. The Island Bay property is now back on the market at $1,100 per week, highlighting the challenges landlords face when they refuse to negotiate.

According to data from realestate.co.nz, average weekly rents across New Zealand have dropped by 2.4%, now standing at $626 per week. Wellington has seen a notable decline, with rents falling by 8.4% to $663 per week. The number of available rental properties in Wellington has surged nearly 20% year-on-year, reaching over 5,000 listings.

Donovan, an economist with Motu Research, pointed out that many landlords might be unaware of the changing dynamics. “The rental market continues to be awash with properties,” he stated, noting a significant year-on-year increase of 91.5% in Wellington’s rental stock, which now boasts 925 available properties.

In particular, the Central Otago Lakes District remains the most expensive area to rent, with an average rental price increasing to $891 per week in December 2025, a rise of 11.8% compared to December 2024. Conversely, the growing availability of rental listings gives tenants more options and increased negotiating power. The number of new rental listings in December 2025 increased by 19.8% compared to the previous year.

As the rental landscape changes, Donovan emphasized the importance of market awareness for landlords. He noted that many landlords may not realize they could benefit from negotiating rents. “We’re not expecting rents to take off,” he explained, “and I think some landlords, if they are not paying attention, have got caught unawares.”

In a recent LinkedIn post, Sean Audain, strategic planning manager for the Wellington City Council, highlighted a substantial increase in consented dwellings, which rose by 79.5% in the year to October 2025. This growth signals potential changes in supply dynamics that could further influence rental prices.

Under the Residential Tenancies Act, tenants have the right to request rent adjustments. Luke Somervell, president of Renters United, encouraged tenants to negotiate. “It’s a tenancy agreement and open to negotiation between two parties,” he remarked. However, he acknowledged that a culture of negotiation is lacking, and many tenants fear asking for reductions due to a perceived risk of retaliation.

As more properties come onto the market, landlords may find themselves needing to adapt to the new reality or risk being left with unoccupied units. The current market conditions present both challenges and opportunities for tenants and landlords alike, making open communication essential for navigating this evolving landscape.