Landlords Urged to Negotiate Rents as Prices Decline

Landlords in New Zealand are facing mounting pressure to negotiate rental prices as the housing market experiences a significant decline. A recent case involving housing policy expert Stuart Donovan highlights the growing trend, as he and his partner prepare to move after their request for a rent reduction was declined. They are relocating to a new home where the rent is set at a markedly lower rate, illustrating the shifting dynamics in the rental market.

Donovan and his wife, who relocated from Brisbane to Island Bay, were paying $1,250 per week for their rental. When it came time for lease renewal, Donovan requested a decrease of $50, given the recent market trends indicating falling rents. “It was weird to experience it first-hand,” he said, noting that their landlord refused to adjust the rent. As a result, they decided to explore other options and found a property in Berhampore priced at $400 less per week.

The latest data from realestate.co.nz shows a nationwide average weekly rent decrease of 2.4%, now standing at $626. In Wellington, the average rent has fallen by 8.4%, reaching $663 per week. The increase in available rental properties is notable, with listings rising nearly 20% year-on-year, exceeding 5,000 properties nationwide. Wellington has seen a staggering 91.5% increase in available rentals compared to the previous year, totaling 925 properties.

This trend is compounded by a significant rise in rental stock across various regions. In Central Otago Lakes District, average rental prices have surged to an all-time high of $891 per week. In December 2025, the region’s rents increased by 11.8% compared to December 2024. Vanessa Williams from realestate.co.nz noted that the influx of listings provides renters with more choices and greater negotiating power.

Interestingly, some landlords are proactively adjusting rents in response to market conditions. One Wellington couple reported a sudden rent reduction from their landlord, who cited alignment with market rentals, despite the tenants not having requested a decrease. Donovan pointed out that the market is likely experiencing a demand shock due to public service cuts and broader economic challenges.

A new district plan allowing for increased housing development has been in effect for 18 months, resulting in a significant rise in building consents. According to Sean Audain, strategic planning manager at Wellington City Council, dwelling consents have surged by 79.5% in the year leading up to October 2025.

Despite these developments, Donovan observed a prevailing reluctance among tenants to request rent reductions. Under the Residential Tenancies Act, tenants can petition the Tenancy Tribunal to adjust their rent to align with market rates. However, many remain hesitant due to fears of repercussions.

Luke Somervell, president of Renters United, emphasized the importance of negotiation in tenancy agreements. He acknowledged that although there is a culture of fear surrounding rent discussions, it is essential for tenants to advocate for fair pricing, particularly in a market where rents have been overly inflated.

As the market continues to evolve, landlords may find themselves needing to adapt their strategies to retain tenants and mitigate potential losses. With a growing number of rental properties and decreasing prices, the landscape is shifting, and those who fail to engage in negotiations may face greater challenges in the near future.