2025 Predictions: What's on the Bingo Card for the NZ Rental Market
Friday, 10 January 2025
Browse
Topic
Related news
By continuing, you agree to our terms of use and privacy policy
Instructions on how to reset your password will be sent to the email below.
Friday, 10 January 2025
The rental market is never boring, is it? Just when you think you’ve got it all figured out, along comes a new piece of legislation to shake things up! With the Residential Tenancies Amendment Act 2024 kicking into gear at the start of the year, landlords, tenants, and property managers are all set for a fresh round of changes.
But what does this mean for the rental market in 2025? Will rents go up or down? Are fixed-term tenancies about to make a comeback? And what about those all-important rules around pets? I’ve been keeping a close eye on these changes (and hearing plenty of chatter from others in the industry), so I thought I’d share my predictions for the year ahead.
From the increasing supply of rentals in urban areas to shifting trends in tenancy agreements, there’s plenty to talk about. So, grab a coffee, and let’s explore what’s likely to shape the rental market in 2025. Whether you’re a landlord looking to stay ahead of the curve or a tenant wondering what these changes mean for you, there’s something here for everyone!
With the new rules allowing landlords to terminate fixed-term tenancies at the end of the term without needing a specific reason, we can expect a surge in fixed-term agreements. This will give landlords greater control over their properties and help them avoid the complexities of terminating periodic tenancies. However, landlords have be careful when using this as it comes with a caveat. There has been some strengthening around the the rights of tenants who can seek damages through the Tribunal if the tenancy is ended unlawfully. Do not use this just to get rid of a tenant who is exercising their rights.
In 2024 we saw rents being to stabilise following unprecedented increases over the previous three to four years. Expect this to continue in 2025. While compliance costs remain a factor, rental prices in major urban centres like Auckland and Wellington are have stabilised and may even decrease. Data from Onehub which is powered by Trade Me shows a –4% drop in the median rental price for Wellington in December 2024 v 2023. This will be driven by an increase in housing supply and strong cuts to the public sector. Additionally, with many investors coming off higher interest rates in 2025, it will be a relief to many investors who have had to put pressure on rents to cover costs.
Onehub data shows that there was a 26% increase in new listings for December 2024 v December 2023, and a 22% increase in the number of days the property is listed for. As the market becomes more competitive, landlords will prioritize retaining good tenants. Property managers will need to focus on building positive relationships with tenants, ensuring prompt maintenance, and offering fair rent increases to reduce turnover.
Proptech adoption will accelerate as property managers and landlords seek efficiencies. Tools like AI-powered inspection platforms, online tenancy applications, and automated communication systems will become standard to streamline processes and reduce costs.
With the amount of change and rising compliance costs, some smaller "mum-and-dad" investors may exit the rental market, particularly those who have been in the game for a long time. This could lead to a consolidation of property ownership among professional landlords or larger firms. Build-to-Rent developments, where properties are designed specifically for long-term rentals, may also gain momentum as institutional investors step in to fill the gap. However, I still anticipate a strong demand for investment properties from a younger generation of investors.
The new pet consent rules will make it harder for landlords to refuse tenants with pets without reasonable grounds. This will likely increase demand for pet-friendly rentals, with tenants seeking properties where they can accommodate their pets. Landlords offering pet-friendly options may gain a competitive advantage, particularly in a tight rental market.
As the law changes and becomes more investor friendly, we may see an increase in Tenant Advocacy. Over recent years, we have seen tenants becoming more aware of their rights and many do turn to Advocacy groups such as Renters Utd to support them. With the updated legislation, we may expect an increase advocacy work due as some landlords will inevitably us the no-cause termination to remove problematic tenants. This will require property managers to stay compliant and provide thorough documentation to protect landlords.
So, there you have it—2025 looks set to be another whirlwind year for New Zealand’s rental market. Whether it’s the revival of fixed-term tenancies, the stabilisation of rents in urban hubs, or landlords navigating new pet rules, one thing’s for sure: there’s never a dull moment in property management!
As we dive into the year ahead, staying informed and adaptable will be the key to success. Whether you’re a landlord, tenant, or property manager, remember: change might be inevitable, but with a bit of preparation (and maybe a good sense of humour), we can tackle anything 2025 throws at us.
Here’s to a year full of opportunities, challenges, and maybe even the perfect pet-friendly rental. Let’s see what happens next!
Want to know more about Property Brokers' superior property management service? Check out our FREE guide here!
From the top of the North through to the deep South, our salespeople are renowned for providing exceptional service because our clients deserve nothing less.
Managing thousands of rental properties throughout provincial New Zealand, our award-winning team saves you time and money, so you can make the most of yours.
With a team of over 850 strong in more than 88 locations throughout provincial New Zealand, a friendly Property Brokers branch is likely to never be too far from where you are.
