Landlords Urged to Negotiate Rents as Market Conditions Shift

Landlords in New Zealand face increasing pressure to negotiate rental agreements as the housing market experiences a notable downturn. The latest data reveals that average rents across the country have dropped by 2.4%, now standing at $626 per week, with Wellington experiencing a more significant decline of 8.4%, bringing average rents down to $663 per week.

Housing policy expert Stuart Donovan recently illustrated this trend through his own experience. He and his partner, after requesting a small reduction in their rent from $1,250 per week in Island Bay, were denied by their landlord. Consequently, they opted to move to a new property in Berhampore, which is 30% cheaper, costing them approximately $400 less per week. This shift reflects a broader trend in the rental market where landlords may be losing long-term tenants due to inflexible rental terms.

“Demand is the main driver and supply is starting to come on,” Donovan explained, noting that many landlords may not be fully aware of the changing market dynamics. He emphasized that landlords who fail to adapt may find themselves having to lower rents significantly to attract new tenants.

According to realestate.co.nz, the number of rental properties available has surged by nearly 20% year-on-year, exceeding 5,000 listings. In Wellington specifically, the available rental stock has increased by an astonishing 91.5% compared to the previous year, with 925 properties currently on the market. This influx gives renters more choices and the potential for greater negotiating power.

In December 2025, the total stock of rental properties also rose to 7,577, representing a 15.9% increase compared to December 2024. Areas such as Central Otago Lakes District remain the most expensive for renters, where the average price hit an all-time high of $891 per week—a rise of 11.8% compared to the prior year.

Vanessa Williams, spokesperson for realestate.co.nz, noted that the growing number of listings could empower tenants to negotiate more favorable terms. “The rental market continues to be awash with properties,” she stated, referencing a 19.8% increase in new rental listings for December 2025.

Interestingly, some landlords have proactively adjusted their rental prices in response to market trends. One Wellington couple was surprised when their landlord announced a reduction in their rent “in line with market rentals,” despite not having requested a decrease. This unexpected adjustment underscores the shifting attitudes among some landlords in a challenging market.

Looking ahead, Donovan anticipates that the ongoing economic challenges, including public service cuts, will further impact demand in Wellington. The local housing market has also seen a significant increase in building consents, which rose by 79.5% in the year ending October 2025, indicating a potential long-term shift in housing availability.

Despite the provisions in the Residential Tenancies Act allowing tenants to request rent adjustments based on market conditions, many renters remain hesitant to approach their landlords. Luke Somervell, president of Renters United, emphasized that while negotiation is a standard part of tenancy agreements, a culture of fear surrounding rent discussions persists.

He pointed out that many tenants are concerned about potential repercussions for requesting lower rents, particularly as renters’ rights have been under pressure. “There’s no motivation for landlords to lower rents while a tenancy is in place,” Somervell remarked, highlighting the importance of open communication between landlords and tenants.

As the rental market continues to evolve in New Zealand, both landlords and tenants are urged to engage in discussions that reflect current economic realities. With rental prices fluctuating and tenant options expanding, the call for negotiation may prove essential for landlords looking to retain tenants and avoid the costs associated with vacancy.