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This blog is a response to the latest NZ Property Report from realestate.co.nz, released in September 2025. It analyses data up to the end of August 2025.
What the Report Found
- National average rent dropped 3% year-on-year to $628/week – the lowest since September 2023.
- Wellington recorded the sharpest fall among major centres, down 11.8% in the past year.
- Other cities also saw declines: Otago (-3.9%), Auckland (-2.3%), Canterbury (-2.1%), and Waikato (-0.6%).
- In contrast, regional markets bucked the trend: Southland hit an all-time high ($509/week, up 9.2%), and the West Coast surged 11.2%.
- New rental listings climbed 16% nationally, with Wellington more than doubling supply (up 105.8% from 274 to 564 listings).
- Realestate.co.nz CEO Sarah Wood noted that the data shows how “the market doesn’t move in unison,” with local supply and demand shaping very different outcomes.
My Perspective
While the headline figures point to falling rents in Wellington, it’s important to unpack the context — and to ask whether this is likely to spill into Auckland, or if it remains mostly a “Wellington issue.”
A Tougher Time for Wellington’s Economy
Across the year to August 2025, 177 businesses shut down in the capital. Since 2023, the city has lost around 9,500 public sector jobs.
This isn’t just about government employees. Consultants, recruiters, and the wider ecosystem of services are all feeling the hit. That downturn flows into hospitality, retail, and the broader economy.
👉 When the Government shrinks, so does Wellington.
Government Cuts and Business Costs
The National Government has aggressively trimmed consultant spending — already down $274m. The initial $400m target has now been upgraded to $800m after uncovering deeper inefficiencies.
At the same time, Wellington businesses face higher overheads. On average, council rates are $20,000 higher than anywhere else in the country. In commercial leases, those costs are passed onto business owners, making office and retail space more expensive and less attractive. In a downturn, fixed costs like that become a major burden.
Rental Market Detail
The reported 11.8% fall in rents should be seen as a return to 2021 levels, not a collapse.
Looking at Wellington City as a whole:
- Listings rose from 1,188 in 2024 to 1,461 in 2025.
- Student numbers have fallen over the past two years, further reducing demand.
With more apartments in the mix (a volatile segment where one or two new developments can shift supply), it’s no surprise that the numbers are swinging more sharply.
Regional Contrasts
While Wellington and Auckland — both knowledge-worker cities — are under pressure, regions like the West Coast are performing strongly.
There, wages, tourism and employment are all up, supported by economies based on mining, forestry, dairy and tourism.
In Auckland, there are early signs of balance returning: listings are down 7% since mid-2025, suggesting the oversupply is easing.
What This Means for Landlords
- Value the tenants you already have — replacing them isn’t always easy in this climate.
- Be prepared to negotiate. After years of relentless growth, a small correction is part of the normal cycle.
- Remember: being a landlord is running a business. Very few industries are escaping economic pressure right now, and property is no exception.
The Bigger Picture
For years, high migration kept rental prices rising, almost insulating the market from economic slowdowns.
Without that buffer, the rental market is now behaving like the wider economy: when conditions weaken, tenants simply have less to spend on rent.
Final Thought
The Wellington rental market isn’t collapsing — it’s resetting. For landlords, this is a time to be pragmatic, look after reliable tenants, and recognise that cycles like this are simply part and parcel of property investment.