Landlords Urged to Negotiate Rents as Market Trends Shift

Housing policy expert Stuart Donovan has issued a warning to landlords: negotiate your rents or face the risk of losing tenants and revenue. Donovan, who recently experienced the challenges of the rental market firsthand, is relocating after his request for a rent reduction was denied. He and his partner, who moved from Brisbane to Island Bay a year ago, will soon vacate their home, which is now being advertised for a lower rent.

The couple had been paying $1,250 per week for their rental property. When it came time to renew their lease, Donovan requested a reduction of $50, citing falling rents in Wellington. “We asked if they could consider the rent in line with market conditions, but their answer was no,” he explained. Disappointed, they began searching for alternatives.

They found a property in Berhampore listed at $400 less per week, which they quickly applied for and secured. The Island Bay property has since been re-listed at $1,100 per week. Donovan noted, “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, incurring costs associated with that.”

According to data from realestate.co.nz, the average weekly rent in New Zealand has declined by 2.4% to $626. In Wellington specifically, rents have dropped by 8.4% to $663 per week. The availability of rental properties has surged almost 20% year-on-year, with over 5,000 rentals currently on the market. In Wellington, the stock of rental properties has increased by an impressive 91.5%, resulting in 925 available rentals.

This surge in inventory is affecting the rental landscape across the country. The total stock of rental properties is up 15.9% compared to December 2024. In contrast, the Central Otago Lakes District remains the most expensive area for rentals, with average prices reaching an all-time high of $891 per week, an increase of 11.8% from the previous year.

Vanessa Williams from realestate.co.nz remarked that the growing number of listings offers renters greater choice and potential leverage in negotiations. “The rental market continues to be awash with properties, with new listings increasing 19.8% in December 2025 compared to the same month in 2024,” she noted.

In a surprising turn, a Wellington couple experienced an unsolicited rent reduction from their landlord last year, who cited a need to align with market rentals. This unexpected decrease underscores the shifting dynamics in the rental market, as Donovan predicts a demand shock due to public service cuts and economic challenges.

Additionally, a new district plan allowing for increased housing has been in effect for 18 months, resulting in a rise in building consents. Sean Audain, Wellington City Council’s strategic planning manager, reported that consented dwellings in Wellington City increased by 79.5% in the year leading up to October 2025.

While many tenants hesitate to request rent decreases, Donovan emphasized that the Residential Tenancies Act allows for tenants to petition the Tenancy Tribunal to adjust rents to reflect market conditions, provided they can supply relevant information.

President of Renters United, Luke Somervell, encouraged tenants to negotiate. “It’s a tenancy agreement and open to negotiation between two parties, but there isn’t a culture of that,” he stated. He added that fear among renters is justified, especially as their rights face ongoing challenges. Despite occasional reports of rent reductions, Somervell noted that landlords often lack motivation to lower rents during existing tenancies.

As the rental market continues to evolve, both landlords and tenants may need to reassess their strategies to adapt to changing economic conditions and market realities.