New Zealand’s Property Rental Market in 2024

As 2024 draws to a close, New Zealand’s rental property market reflects the economic turbulence of the past year. The landscape has shifted significantly from early 2024, when demand for rentals was surging, to a slower, more competitive environment for landlords as the year ends. While 2025 holds potential for recovery, it’s likely to remain a cautious and uneven period for both landlords and tenants.

Early 2024: High Demand, Limited Supply

At the start of the year, the rental market was marked by robust demand, driven by a combination of factors:

• High immigration rates brought international students and skilled workers to urban hubs like Auckland, Christchurch, and Wellington.
• Housing shortages across many regions continued to push prices up, as the supply of affordable homes lagged behind demand.
• Tight competition among tenants meant landlords could still command higher rents, particularly in key cities and high-demand suburbs.

Late 2024: Cooling Demand and Rising Listings

As the year progressed, market dynamics shifted:

• Affordability pressures intensified due to high living costs, interest rate increases, and stagnant wage growth, leaving many renters unable to keep up with rising rents.
• Migration patterns stabilized, with net outflows to Australia reducing pressure on the market.
• Supply increased, with rental listings reaching their highest levels since 2018, creating a surplus in many regions and giving tenants more choices.

By the end of 2024, landlords faced increased competition to secure tenants, resulting in downward pressure on rents in several areas. Urban centers like Auckland and Wellington, which had been strongholds of rental demand, began to see higher vacancy rates and slower tenant turnover.

As of December 2024:

• Listings are abundant compared to demand, with vacancy rates rising in many areas.
• Landlords are competing for tenants, often offering incentives like reduced rents, flexible lease terms, or property upgrades to attract high-quality tenants.
• Rent growth has slowed or reversed in some regions, particularly in areas where economic challenges have hit hardest, such as Wellington.

The rental market remains far from uniform across New Zealand:

• Auckland: Still grappling with long-term housing shortages, demand for rentals persists but has moderated. Renters have more bargaining power now than at the start of the year.
• Wellington: Economic struggles have softened demand, and rents in some segments have dropped as landlords try to avoid prolonged vacancies.
• Canterbury and Otago: These regions show greater stability, with a mix of resilient demand and moderate rental growth.
• Smaller towns and rural areas: Declining demand due to migration patterns and employment challenges has made these markets increasingly tenant-friendly.

The rental market in 2025 is expected to remain slow in the early months, with recovery dependent on several factors:

• Economic stabilisation: A potential recovery in employment and wages could restore tenant affordability.
• Policy interventions: Changes in housing, immigration, or economic policies may influence market dynamics.
• Migration trends: If net migration rises again, especially from international students and skilled workers, demand in urban centers could bounce back.

While the long-term outlook remains cautiously optimistic, the immediate future will likely continue to favor tenants, with landlords needing to remain flexible and competitive.

As we move into 2025, New Zealand’s rental market reflects the complexities of a challenging year. The stark contrast between the high demand of early 2024 and the tenant-friendly conditions at its end underscores the need for adaptability. Both landlords and tenants must navigate this evolving landscape, balancing short-term realities with the potential for future growth.