Rents are falling. What does that mean for landlords?

Monday, 10 November 2025

Tenants have the upper hand in the rental market as rents continue to fall and landlords compete to find good tenants, new data shows.

Realestate.co.nz’s latest figures show the national average weekly rental price fell 3.2% annually to $628 in October.

For the past three months it has been sitting between $624 and $628, the lowest it has been since September 2023.

In the Auckland and Wellington regions average weekly rents were down annually by 3.4% to $683 and 9.6% to $634 respectively, while in Canterbury they inched up by just 0.2% to $586.

At the same time, new rental listings were up 11.4% nationwide in October, as compared with the previous year, while stock was up by 21.2%.

Realestate.co.nz spokesperson Vanessa Williams said declining rents gave tenants a rare spot of relief, but for landlords it signalled tighter conditions.

“The fact that average rental prices are down nationally tells us the rental market is going in a different direction from the broader cost-of-living pressure, which is certainly welcome news for tenants.

“But for landlords, that means despite being hit with rising living costs, they may not be able to command the higher rental prices they would like.”

Tenants had plenty of choice in the current market, and landlords needed to keep that in mind, she said.

'Anecdotally, we are hearing some landlords are increasing prices, but if their tenants move out, they may need to reduce the price to secure new tenants.”

There was strong regional variation, and that made it important for landlords to understand what was driving demand locally, she said.

“In some regions increased supply is softening prices, while in others stable or rising rents reflect ongoing competition for homes.

“Setting the right rental price is about more than national trends and requires a close look at local conditions and tenant expectations.”

The Wellington region was a classic case of supply and demand, as the sharp lift in rental supply had given tenants more choice and negotiating power, she added.

“Increased competition among landlords is likely contributing to the downward pressure on prices.”

Economist Tony Alexander surveys property investors regularly and his latest survey provided further evidence that the current market is not favourable to landlords.

It revealed a net 39% of landlords were finding it difficult to secure a good tenant in October, up from 36% the previous month. That was a near record net proportion.

The survey also found that a net 42% of landlords planned to raise their rents in the next year, which was consistent with recent months.

But it was well down on the period between March 2023 and May 2024 when the proportion of landlords planning rent increases was consistently near the 80% mark.

And the average rise in rents that landlords wanted to achieve in the coming year had eased to 3.8% from 3.9% in September and 4.1% in August.

Alexander said the overall situation was one in which tenants faced a good range of options to secure accommodation, although not necessarily in all locations, even if the rents they paid were high by past standards.

When Barfoot & Thompson released their latest Auckland rental data in October, the agency’s general manager property management Anil Anna said the consistently lower levels of renter activity over the past year had created a highly competitive environment for landlords.

That had prompted many to hold and, in some cases, reduce rents to retain existing tenants or attract new ones, he said.

“With so much choice available, and fewer people looking, property owners are under pressure to be more competitive on price and presentation.

“Our managers tell us interested tenants are making very cautious and considered decisions about their next move, and price is a major factor in the current economic environment.”