Landlords struggle to find tenants as rent growth slows

Tenant demand is cooling across New Zealand’s rental market, with a record net 41% of residential landlords reporting difficulty finding good tenants – up from a net 25% who said the opposite just 15 months ago. 

“This turning of the measure is a stark gauge of how much and how quickly conditions have altered in the residential rental market,” said independent economist Tony Alexander (pictured). 

Crockers Property Management and Alexander’s July 2025 Investor Insight survey, based on 288 responses, found that slowing net migration and sustained new housing supply are driving the shift. 

Supporting this trend, realestate.co.nz reported a 2.7% annual drop in the national average rent in June 2025, down to $636 per week. Wellington led the decline with a 10.9% fall to $625, while rental listings surged in regions such as Wellington and Hawke’s Bay. 

Rent increases level out, yield pressures persist 

Although 47% of landlords plan to lift rents in the next six months (up slightly from 44% in June), the average planned rent rise has fallen to just 3.9% – well down from 4.5% a year ago and 6.3% two years ago. 

This sustained decline signals tighter margins for investors. 

Investor appetite continues to cool 

Just 17% of landlords are considering buying another property in the next year – down from 20% in June and 22% in May. Meanwhile, 31% say they’re thinking of selling, unchanged from last month. 

That translates to a net 14% of landlords planning to reduce their portfolios. 

“This net intention has been negative since mid-2023,” Alexander said. 

Long-term holding drops as investor cohort ages 

Only 33% of investors say they’ll “never sell,” while another 18% plan to hold for at least a decade. Combined, just 51% of investors expect to own their current investment for 10 years or more, a figure that continues to fall. 

Alexander noted this reflects both an aging investor base and recognition of “the lower potential for ongoing capital gains compared with the past three decades.” 

Shift toward existing homes, not new builds 

Among investors still looking to purchase, more are favouring existing dwellings – a trend tied to weaker construction incentives, higher build costs, and a large resale supply. 

Investor concerns: costs rising, price falls feared 

Landlords are most worried about insurance premiums, local council rates, and house prices. 

“This month there has been a sizeable jump in investor concerns about house prices falling,” Alexander said, reflecting recent monthly price declines. 

Worries about mortgage repayments and bad tenants were comparatively minor, while anxiety around net migration continues to rise. 

Credit conditions stable, but adviser caution advised 

Only a net 1% of landlords said their bank was easing credit. That’s the least positive reading in a year, suggesting banks are not targeting investors for growth—at least for now. 

Alexander concluded that falling interest rates have not yet reignited optimism among property investors, and market uncertainty remains high. 

Read the full Tony Alexander Survey Report for more information.  

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