The housing economist who tested the rental market — and watched it prove him right
Tuesday, 13 January 2026
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It’s not often housing policy expert Stuart Donovan sees the housing market in action in person.
But he and his partner are in the process of moving after asking for a rent reduction and being told no.
So by the end of the month they will be moving to their new home - and their landlord is now advertising for a new tenant - at a lower rent.
Donovan and his wife moved from Brisbane a year ago and found a home they liked in Island Bay. The rent was $1250 a week and they liked the house and the area.
But when it came to renew the tenancy he asked for the rent to be dropped - by $50.
Donovan, an economist working for Motu Research, was very aware that rents in Wellington had been falling in recent times.
“It was weird to experience it first-hand,” he said.
“We said would you be able to consider the rent in line with market conditions but their answer was no. We were a bit sad, so we thought we’d have a look at what was available.”
Then a friend saw a listing in Berhampore that was 30% cheaper - about $400 a week less.
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“There was a lot of interest in it. We applied and got it then told the landlord.”
Now the Island Bay property is back on the rental market at $1100.
“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 and there are costs associated with that,” Donovan said.
The latest figures from realestate.co.nz show that nationwide the average weekly rent has dropped 2.4% to $626 per week.
Rents have been falling around the country for months with Wellington’s down 8.4% to $663 a week. The number of rentals available continues to climb almost 20% year-on-year to more than 5000 properties.
In particular, Wellington has had 91.5% year-on-year increase in stock with 925 available rental properties.
Stock levels have increased significantly in parts of the country as well. Total stock of 7577 was 15.9% more than in December 2024.
Central Otago Lakes District is the most expensive place to rent, by more than $200. The region’s average rental price hit an all-time high of $891 per week in December 2025, 11.8% more than in December 2024
Realestate.co.nz’s Vanessa Williams said more listings gave renters more choice and potentially more negotiating power in the year ahead.
“The rental market continues to be awash with properties with the number of new rental listings increasing 19.8% in December 2025 to 5349, compared to 4464 in December 2024.”
Meanwhile a Wellington couple were startled when their landlord last year told them he was lowering the rent “in line with market rentals”.
They had not asked for a rent decrease and it came out of the blue.
But Donovan said Wellington was expecting demand shock - with public service cuts and the economy not having done well.
As well a new district plan which allowed more housing had been in effect for 18 months and it had seen building consents rise.
“Demand is the main driver and supply is starting to come on. We’re not expecting rents to take off and I think some landlords, if they are not paying attention, have got caught unawares,” Donovan said.
In a New Year’s LinkedIn post, Wellington City Council strategic planning manager Sean Audain said Stats NZ’s latest figures showed Wellington City’s consented dwellings were up 79.5% in the year to October 2025.
“Regionally Wellington is up 25%. Whilst dwelling consents still have a way to go the mix of locations and types are showing promising signs of growth.”
Donovan said there was a default assumption that tenants shouldn’t ask for a rent increase - and that many would be afraid to try.
But under the Residential Tenancies Act there is provision to ask the Tenancy Tribunal to order the landlord to lower it to a market rent - but you will need to supply information about what that is and what is fair in your area.
Landlords can increase rents yearly.
Renters United president Luke Somervell said it was always worth asking.
“It’s a tenancy agreement and open to negotiation between two parties but there’s not a culture of that,” he said.
Somervell said fear was justified especially since renters’ rights were being rolled back.
He said Wellington had some absurdly overinflated rents and while he had heard of instances of rents dropping, there was really nothing to motivate landlords to drop rents while a tenancy was in place.
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