Landlords Urged to Negotiate Rents as Tenants Seek Better Deals

Housing policy expert Stuart Donovan recently experienced the realities of the fluctuating rental market firsthand. After requesting a rent reduction from his landlord, he and his partner decided to relocate when their request was denied. They are moving from a property in Island Bay, which had a weekly rent of $1,250, to a new home in Berhampore, where the rent is approximately $400 less per week. This shift highlights the changing dynamics within the rental market, particularly in Wellington.

Donovan, an economist at Motu Research, found himself in an unusual position for someone familiar with economic trends. When he asked for a $50 reduction during the lease renewal, he was taken aback by the landlord’s refusal, especially given the recent decline in rental prices across the region. “We were a bit sad, so we thought we’d have a look at what was available,” he noted, reflecting on the experience.

The latest data from realestate.co.nz indicates that the average weekly rent in New Zealand has decreased by 2.4%, now standing at $626. In Wellington specifically, rents have fallen by 8.4% to $663 per week. The availability of rental properties has surged, with listings increasing by almost 20% year-on-year, providing tenants with more options than ever before.

As landlords face a rising number of vacancies, Donovan emphasizes the importance of negotiation. “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,” he stated, illustrating the potential financial impact on landlords who do not adapt to market realities. The Island Bay property is now being advertised for $1,100 per week, a direct response to the shifting rental landscape.

The increase in rental stock is particularly pronounced in Wellington, where the number of available properties has surged by 91.5% over the past year, reaching 925 available rentals. This trend reflects a broader national increase in rental listings, with the total stock rising by 15.9% compared to December 2024.

Vanessa Williams from realestate.co.nz noted that this influx of listings provides tenants with a greater selection, which could enhance their bargaining power. “The rental market continues to be awash with properties,” she explained, citing a 19.8% increase in new rental listings in December 2025 compared to the previous year.

Interestingly, some landlords are proactively adjusting rents in response to market conditions. In one case, a couple in Wellington was surprised when their landlord announced a rent reduction “in line with market rentals,” despite not having requested it. Donovan pointed out that Wellington is expecting a demand shock due to anticipated public service cuts and the broader economic downturn.

The impact of new housing policies is also being felt. A new district plan aimed at increasing housing availability has been in effect for 18 months, leading to a significant rise in building consents. According to Sean Audain, strategic planning manager at Wellington City Council, consented dwellings have increased by 79.5% in the year to October 2025, indicating a positive trend for future housing supply.

Despite these trends, there remains a prevailing reluctance among tenants to request rent reductions. Luke Somervell, president of Renters United, noted that while it is always worth asking for a rent decrease, there is often a lack of negotiation culture between landlords and tenants. He acknowledged that fear among renters is justified, especially in light of recent rollbacks in renters’ rights.

As the rental market continues to evolve, both tenants and landlords must navigate these changes carefully. With increased competition and a growing supply of rental properties, those who remain flexible and open to negotiation may find themselves better positioned in this dynamic landscape.