New Zealand’s rental market has started to swing in favour of tenants, as easing migration and rising supply take the heat out of rents, according to Cotality’s July Housing Chart Pack.

Data from the Ministry of Business, Innovation, and Employment (MBIE) shows that the national median rent in the three months to May edged down by -0.3% from last year, not a big fall but still the first since late 2009.

After significant increases over 2021-23, rental growth has generally petered out in recent months, or turned negative in some key centres.

There has been a rare shift in markets such as Auckland where the median weekly rent has dropped -2.0% over the past year to $650. Wellington City has also seen a decline of -0.8%, down to $602. Tauranga and Christchurch are other main centres with soft rents at present.
Median weekly rents in three months to May, % change from a year ago

Sources: MBIE, Cotality (formerly CoreLogic)

Cotality Chief Property Economist Kelvin Davidson said this shift is being driven by a range of interrelated factors.

“There was a sharp rise in rents post-COVID as borders reopened and net migration spiked. Many new migrants tend to rent, especially given the foreign buyer ban, and that demand placed pressure on key centres such as Auckland.”

“At the same time, rental supply was tighter. Investor activity had dipped due to rising mortgage rates and tax rule changes, which arguably meant fewer rental properties were added to the available pool than otherwise might have been the case.”

Mr Davidson noted that these dynamics pushed rents up to high levels, both in dollar terms and relative to household incomes, placing strain on tenant affordability.

“This affordability ceiling is now acting as a natural brake on further rent increases.”

“And while it’s still expensive to be a tenant, the balance of power has shifted slightly. It’s not suddenly easy to rent, but it is nevertheless a friendlier market for tenants than it has been in recent years,” he said.

Recent falls in net migration have reduced marginal rental demand growth, while the supply of available listings rises.

“Supply has risen as investors are starting to return to the market, and at the same time we’re seeing the completion of many new-build properties.

“Overall, this has contributed to a softening in the rental market, with conditions gradually shifting in favour of tenants,” Mr Davidson concluded.

 

Highlights from the July 2025 Housing Chart Pack include:
  • New Zealand’s residential real estate market is worth a combined $1.65 trillion.
  • The Cotality Home Value Index shows property values across New Zealand ticked up by +0.2% in June. Over the three months to June, however, there was a -0.1% dip in median property values across NZ.
  • The total sales count over the 12 months to June is 85,951.
  • Total listings on the market were 27,006 in June. The total number of properties listed on the market remains elevated, although the seasonal fall for new listings flows means that agreed sales have just started to eat into stock levels.
  • The pace of rental growth remains subdued, with net migration having fallen a long way from its peak, and the stock of available rental listings on the market still elevated.
  • Buyer Classification data shows first home buyers made up 26% of purchases from April to June, while smaller investors (‘Mums and Dads’) are having a comeback, targeting cheaper, existing dwellings.
  • Gross rental yields now stand at 3.8%, which is the highest level since mid-16.
  • Inflation is back in the 1–3% target range. The Reserve Bank looks set to cut the official cash rate again to 3.0%, potentially as soon as August.
  • The Chart of the Month for July highlights MBIE data showing the annual % change in median weekly rents over the three months to May. After years of sharp increases, rents are now softening in some main centres, with Auckland down -2.0% to $650, alongside modest declines in Wellington City (-0.8%) and Tauranga (-0.2%).