Over the past five years, New Zealand’s rental market has undergone a significant shift. After a period of steep increases, recent data shows a moderation—and in some regions, a real decline—in rents. This analysis explores the trends, drivers, and regional differences in New Zealand’s rental market from 2020 to 2025, and considers what it means for tenants, landlords, and policymakers.

The Five-Year Picture: From Rapid Rises to Recent Relief

2020–2022: The Boom Years

Rents soared across New Zealand, driven by strong population growth, high net migration, and a constrained housing supply.
Median rents rose by over 25% since the onset of the Covid-19 pandemic, with the tightest markets in Auckland and Wellington.
Demand consistently outstripped supply, and new listings were snapped up within days. Renters faced fierce competition, often writing personal appeals to secure a home.

2023–2024: Plateau and Early Signs of Change

The pace of rent increases began to slow in late 2023 as housing supply caught up with demand.
Government and council data showed a construction boom, with Auckland alone completing up to 2,000 new dwellings per month at the peak.
By late 2024, the national average rent hovered around $600 per week, with Auckland at $650 and the West Coast at $400 per week. Some regions, like Marlborough, saw rents rise, while others, like Southland, saw declines.

2024–2025: Rents Begin to Fall in Key Markets

By early 2025, Trade Me and Realestate.co.nz data showed a record number of rental listings, up 41% year-on-year.
Nationally, asking rents on new listings fell 2.3% over the past year, saving households nearly $800 annually on average.
Wellington’s average rent dropped 7.2% to $647 per week; Auckland’s fell 3.3% to $702. The national average decreased by $14 per week.
These declines are most pronounced in major cities, while smaller centres like Whangarei, Rotorua, and New Plymouth still face high rent-to-income ratios—often above 30%.

Drivers of Change: Why Are Rents Falling?

1. Increased Housing Supply

The construction boom from 2020–2023 added thousands of new homes, particularly in Auckland.
More supply has led to a record number of vacant rentals, giving tenants more choice and reducing landlords’ ability to raise rents.

2. Shifts in Demand

Fewer people are forming new households, with more young adults staying with parents or moving overseas due to cost-of-living pressures.
A slower property sales market has prompted investors to hold onto rentals, adding to supply.

3. Policy and Market Adjustments

The new coalition government has restored mortgage interest deductibility for landlords, aiming to keep more rental properties in the market and ease upward pressure on rents.
Changes to eviction rules and notice periods have created more flexibility but also more insecurity for tenants.

4. Economic Environment

Wage growth and employment remain key drivers of rent levels, but affordability is stretched. The rent-to-income ratio has held at a record 28% for three years, with many tenants already at their financial limit.

Regional Differences: Winners and Losers

Auckland & Wellington: Rents have become more affordable relative to incomes (Auckland: 25%, Wellington: 23% of income spent on rent).
Smaller Centres: The affordability crisis has shifted—Whangarei, Rotorua, and New Plymouth now have rent-to-income ratios above 30%, higher than the main cities.
Hawke’s Bay & Taranaki: These regions saw particularly sharp falls in asking rents for new listings.

The Reality for Renters

Despite recent drops, rents remain historically high and affordability is still a major issue. Many tenants, especially lower-income families, spend a significant share of their income on rent, leaving little for essentials. The return of no-cause evictions has also reduced housing security for renters.

The Outlook: Will Rents Keep Falling?

Supply Growth Slowing: While new housing completions remain strong, they are down from their 2023 peak. If construction slows further, the downward pressure on rents may ease.
Policy Uncertainty: The impact of ongoing government reforms—on landlord incentives, tenancy security, and housing supply—will shape the market.
Affordability Still Stretched: Even as rents fall or stabilise, housing remains deeply unaffordable for many, especially in smaller centres.

Summary

Over the past five years, New Zealand’s rental market has shifted from rapid rent increases to a period of moderation and, in some cities, outright decline. Increased housing supply, changing demand, and new government policies have all contributed to this trend. However, affordability remains a challenge, particularly outside the main centres, and the future path of rents will depend on continued supply growth and effective policy. For renters, the recent relief is welcome—but the underlying crisis is far from over.