Rental Market Update January 2025 – Law Changes, and Data to Help You with Your Next Property Purchase

Property Managers at Aspire Property Management

Welcome to 2025, hopefully a year that sees the cost-of-living crisis ease and interest rates lower. Fingers crossed! At Aspire, we welcomed 108 new customers in Q4 2024, perhaps a sign that investors are seeing better times ahead.

Important Tenancy Law Changes

The Residential Tenancies Amendment Act 2024 introduces several significant changes affecting both tenants and landlords in New Zealand, with many of the changes being positive for landlords. Here’s an overview of the key amendments and their implementation timelines:

1. Online Bond Lodgement

  • Change: Signatures are no longer required for lodging or topping up a bond. Bonds must now be lodged and paid online, eliminating the need for manual lodgement via email or post.

  • Effective Date: 17 December 2024

2. Tenancy Terminations

Periodic Tenancies

  • Landlords can terminate a periodic tenancy without providing a specific reason by giving 90 days’ notice.

  • Tenants can end a periodic tenancy with 21 days’ notice (it was 28 days’ notice).

    A 42-day notice is permissible in the following circumstances:

  • The owner or their family member requires the property as their principal residence within 90 days of the tenancy ending and will reside there for at least 90 days.

  • The landlord’s employee or contractor needs the property for occupation, provided this use is stated in the current tenancy agreement.

  • An unconditional agreement for the sale of the property requires vacant possession.

Fixed-Term Tenancies

  • Ending a fixed-term tenancy on the expiry date will be easier, but action is still required if you want the tenancy to end.

  • Fixed-term tenancies will automatically roll over into periodic tenancies unless:

    1. The landlord or tenant gives notice to end the tenancy between 90 and 21 days before the fixed term ends. No specific reason is needed for this notice.

    2. Both the tenant and landlord mutually agree on an alternative arrangement.

  • The current law applies to tenancies that started on or after 11 February 2021 and expire on or before 30 April 2025. However, the new regulations will take effect for fixed-term tenancies expiring on or after 1 May 2025.

3. Technical Changes

Notices and Documents

  • Notices and documents can be served electronically if an electronic address (eg: email) has been provided as an address for service in the tenancy agreement. A physical address for service is still required.

Smoking

  • Clarifies that clauses in tenancy agreements banning indoor smoking of tobacco products are enforceable in the Tenancy Tribunal.

  • Effective Date: 20 March 2025

4. Pet Consent Rules and Pet Bond

  • Change: Introduces provisions allowing for pet bonds and changes to pet consent rules.

  • Effective Date: To be set by Order in Council; the specific date is yet to be announced.

For further information on these changes, see the Tenancy Services website. As your property manager, we are fully aware of these changes and will manage them on your behalf. They give both parties more flexibility, but the return of the 90-day notice for periodic tenancies is a big win for landlords. 

Healthy Homes Deadline

A reminder that the Healthy Homes deadline for compliance is 1st July 2025. Here is some handy information about the Healthy Homes Standards. We are currently being spot audited by MBIE regarding Healthy Homes at several of our properties, so the government is taking compliance seriously. 

The Residential Rental Market

The rental market remains fairly flat across most of New Zealand amid slowing net migration. New Zealanders are still leaving in higher numbers than they are arriving (25,000 arrived and 77,900 left in the 12 months ended Oct 2024), and fewer non-NZ citizens are arriving than in previous years (144,900 arrived, which is 32% down on the previous 12 months). Net migration is still positive but in decline, as you can see below. For further reading, see the StatsNZ website.

Estimated migration December 2001 - October 2024

The good news is that even with the changes in net migration, rent prices are holding steady in Auckland, and the average median rent is up 4% year on year in the Waikato and 2% in the Bay of Plenty. 

Below is all the data we can access from Trade Me for Auckland, Bay of Plenty, and Waikato. You can see that the number of listings has increased significantly year on year, and properties are taking longer to rent. 

Our advice is to keep your property in tip-top shape so it’s at its best when prospective tenants come through. Try and hold onto incumbent tenants so you don’t risk vacant periods, and consider allowing pets if you haven’t already, to make your property attractive to a wider pool of prospective tenants. We recently published an article about the difference professional photos can make when trying to attract viewers, and for achieving your best rental price.

Auckland Rental Market Insights December 2024
Waikato Rental Market Insights December 2024
Bay Of Plenty Rental Market Insights December 2024

Looking to Buy Another Property?

We met with Trade Me in December and they shared some interesting information about supply and demand in each suburb in Auckland. We asked permission to share the data with property investors as it’s valuable information for any landlord looking to purchase an investment property.

Data from searches on Trade Me for 12 months Dec '23 - Nov '24

Infographics of the Top Suburbs in Auckland Region
Infographics of the Top Suburbs in Auckland City
Infographics of the Top Suburbs in North Shore
Infographics of the Top Suburbs in Waitakere
Infographics of the Top Suburbs in Manukau

Commercial Property Update

The Auckland commercial property rental market continues to see divergent trends across sectors, with industrial properties continuing to be the strongest performers. The industrial sector experienced a surge over the last 2-3 years, with warehouse rental rates at, or surpassing, office rates, supported by a historic low vacancy rate of less than 1% across Auckland industrial space. The latter half of 2024 saw a retraction in this trend. Demand for quality industrial spaces remains robust, though some cooling is evident.

In the office sector, the rise in work-from-home trends has led many small to medium-sized enterprises (SMEs) to reassess their space requirements. This has increased the likelihood of tenants putting more emphasis on their occupancy costs, and evaluating a downsize during lease renewal negotiations, as businesses adapt to flexible working models and look to curb what is usually their biggest overhead.

The retail and hospitality sectors continue to face strong economic headwinds and ongoing challenges. High vacancy rates and significant incentives offered to attract tenants highlight the sector’s vulnerability to economic downturns. Recent high-profile liquidations and receiverships over the past year underscore the pressures in this market, despite retail properties often offering higher rental yields.

It is also worth noting the current position in the interest rate cycle, which RBNZ has eased over the last several OCR announcements. This presents strong buying opportunities both on and off-market. If you would like advice or assistance in exploring these opportunities and taking advantage of market conditions to grow your portfolio, we are here to help. Please reach out to Blake or Lauren at any time. 

What’s Happening at Aspire?

We’ve recently welcomed three new team members as we expand our staff with our growing customer base. We now have 22 staff working hard to keep our customers’ investment portfolios performing their best.

Property Managers at Aspire Property Management

If you have any questions, or you would like to join Aspire, please feel free to contact us now!

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