September 25, 2025 • 9 mins
Good news for renters as prices are on the decline.
At least a third of those taking out new tenancies this year are paying less in rent than the prior tenants, according to Ministry of Housing and Urban Development data.
TradeMe Property has also seen rents fall, with supply outstripping demand. They say the market is offering more options and less competition.
New Zealand Property Investors Federation President Peter Ambrose told Kerre Woodham the reason behind increased supply is twofold.
He says there’s been a fair bit of new construction coming onto the market, and at the same time, people are increasingly leaving major cities and the country itself.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
You're listening to the Carry Wood and Morning's podcast from
news Talks.
Speaker 2 (00:10):
He'd be so, as I was saying, at least a
third of people taking out new tenancies this here are
paying less rent than the tenants who lived in the
same property before them. Rents are falling? Is supply out
strips demand? Yesterday I read an email from Bob which
in part said the tax cuts should never have happened
except for the most needy. A text responded by saying,
(00:30):
remind Bob, are rents not the lowest they've been for years?
Is that not a direct result of the tax clawback
for landlords? Well?
Speaker 1 (00:39):
Is that?
Speaker 3 (00:40):
Why?
Speaker 2 (00:40):
To discuss this, I'm joined by New Zealand Property Investors
Federation President Peter Ambrose. Very good morning to you.
Speaker 3 (00:47):
Good morning Carry.
Speaker 2 (00:49):
What is it? Why are rents falling? Is it this
simple fundamental that when supply outstrips demand, price is full?
Speaker 3 (00:59):
Absolutely, Carry. I think it's predominantly. That's the main reason.
It's way too much. I guess supply this is what
the demand currently is.
Speaker 2 (01:07):
And where is that supply coming from?
Speaker 3 (01:11):
Well, it's twofold. Obviously. There was quite a lot of
activity in the construction market leading up around twenty twenty one,
twenty twenty two, and those are coming into the market
well recently. But at the same time, of course, we've
seen job losses. We've seen a lot of kiwis leave
(01:31):
the country as well. Stats I've seen recently show that,
you know, in the last four years, Auckland population has declined,
Wellington population has declined, and then on top of that
there's a whole lot of new construction that's come to
the market. So I do I agree it's supplying demand predominantly.
Speaker 2 (01:51):
And so are some of the people who are rent
as accidental landlords because they're leaving to find work overseas,
not sure if they're coming back, so they'll rent out
their home to give themselves options or.
Speaker 3 (02:04):
Yes, yeah, that's definitely the case. We're seeing that we're
tribe to sell their family home. They can't because you know,
there's there's no one will we're willing to take that
property at the price they're advertised, and they've found a
job elsewhere, mainly Australia, I guess, so they put their
property onto the rental pool, which again adds adds to
(02:27):
the supply.
Speaker 2 (02:28):
It does, it doesn't necessarily mean that you're going to
get good landlords if you're only there because you kind
of have to be and don't really understand the job.
Because it is a job, isn't it.
Speaker 3 (02:38):
Oh, one hundred percent? Yeah, I mean it has. You've
got to treat it as a business because you're providing
you know, a quality hopefully a quality product that someone
wants to rent from you. I mean, we see in
New Zealand, I mean sixty percent of rental properties managed
by the investor or the landlord themselves, and forty percent
(03:00):
are around go to property managers to manage their property.
So if you have those who are leaving the country,
obviously they would hopefully use a property manager to manage
their properties and then that would be done more professionally.
Speaker 2 (03:14):
Yeah. Absolutely, did you see it, because I've had quite
a few texts, well, I've had about four or five
texts in the last half hour from people who said
they were badly bruised by the narrative around landlords when
labor was in when Jasinda a Dune said report any
bad landlords directly to me, they got out and just
(03:35):
put the houses up as airb's and b And they've
come back now into the market because it makes financial sense,
and because it isn't such a devisive narrative.
Speaker 3 (03:46):
Well, that's that's exactly right. I mean, it's not cool
to be a landlord was the way it was communicated.
But when you look at you know, providing private landlords
provides households for about six hundred and four thousand families,
so it's just significant amount. It was about thirty percent
(04:08):
thirty four percent rent in this country from private landlord.
So there are a lot of people that I guess
were didn't want to be associated as being a landlord.
Still providing quality accommodation for people, I mean it's not
just you know, the motivation to be a landlord can
be manyfold. It could be just to support your local
(04:31):
family and fine hour and just a legacy or fee
of grandmother or father or of relatives. And of course
the tax thing made it extremely difficult just to just
to survive in that environment when so much tax was
being paid for providing rent for accommodation, which of course
is exempt.
Speaker 2 (04:52):
When they when it was first announced, you know that
that you couldn't claim your expenses anymore. I didn't think
a lot of people told me on air that they
were going to get ou that they were going to
sell up their investment property, and that was that, you know,
they were getting out of the market. And I thought,
surely they wouldn't do that because the capital gains they'll
(05:13):
make on that property over time would surely offset the expenses.
But according to your records, did you keep records? It
appears that's exactly what happened. People said, all right, then, bug,
you will just sell the property and where off.
Speaker 3 (05:29):
And I think that was the case in some cases,
but I mean again, it's up to the everyone's got
a different situation. So there's a big difference between selling
your property, which you can tend to only sell once
and make one sort of either cement your loss or
some mental profit, versus being able to sustain that rental
going forward to provide accommodation on a weekly basis as
(05:51):
far as income and expenses is concerned. So if the
rent's not covering the simplest of things far as mortgage
repayments are concerned, then that has to be substituted from
another form of income, whether it be salary or wage
or other form of events. And then then it's a
conversation around while am I supplementing that sufficiently that if
(06:13):
I do get any capital gains, will I get that
back when I eventually do sell. But what we've seen
since twenty twenty one is property prices decrease significantly, and Wellington,
I'm very aware that you know some well some properties,
their new cvs are down thirty percent from what they
were in twenty twenty one. Now that's that's a significant number.
(06:35):
So yeah, so even if you're looking to sell, I mean,
are you going to be able to cover your mortgage?
I mean, that's that's that's the dilemma that some landlord's face.
So having a property rented it becomes sort of paramount
just to be able to survive in these in these times,
while just to make ends meets with rates, I mean
(06:56):
rates double digit increases, insurance and course maintenance, so none
of those prices, those costs go down. So yeah, so
it's very much some did who could if you like,
or if they've got if they had a few properties,
they might try to sell one or two to try
(07:17):
and get back to an equilibrium at least for cash flow.
But as a general almost most people sort of held
on for that reason. Just with the property prices going down,
then you know they weren't able to sell to at
least cover off their mortgage.
Speaker 2 (07:32):
God, you had the double whammy and Wellington too, didn't you,
with the job losses as well as the property devaluations.
Speaker 3 (07:40):
Well absolutely, and student numbers as well. I mean we
are a student city as well as public service, and
student numbers went down significantly as well. I mean they're
just starting to come back up again now, which is
which is good news. So hopefully you know, things improved
going forward.
Speaker 2 (07:56):
But they couldn't get much worse good then.
Speaker 3 (07:59):
I often think that, but what could possibly go wrong here?
At you?
Speaker 2 (08:04):
So do you think that that people who haven't got
the bottle, who haven't got the nerve, the sort of
part time investor, the ones have been seduced by the
ads that we play on our own station that if
you don't get an investment property, you're missing out. But
you know, do you think they are now either have
left the market or are going to steer clear of
(08:26):
investment properties as a way.
Speaker 3 (08:28):
Of look, I think it's a long term game that
you have to think about that. I mean, over over
a period of time, history has shown that property prices
tend to increase. It's mainly the land value of course,
because properties actually do depreciate and value if they need
to be maintained. Of course, if you look at your
own house, how often do you sort of need to
replace carved or the kitchen or so. So I think
(08:52):
it's got to be treated as a long term just
like any other investment, and you know, and you have
to be able to sustain the ups and the downs.
But I think, you know, there is definitely some people
that have sold out in some for a loss. I mean,
I know people have sold for a loss so they
can carry on with their life offshore or in another
(09:13):
part of the country.
Speaker 2 (09:14):
Lovely to talk with you. Thank you so much for
your insight. Peter Ambrose, President of the New Zealand Property
Investors Federation.
Speaker 1 (09:21):
For more from Kerry Wooden Mornings, listen live to news talks.
It'd be from nine am weekdays, or follow the podcast
on iHeartRadio.
You're listening to the Carry Wood and Morning's podcast from
news Talks.
Speaker 2 (00:10):
He'd be so, as I was saying, at least a
third of people taking out new tenancies this here are
paying less rent than the tenants who lived in the
same property before them. Rents are falling? Is supply out
strips demand? Yesterday I read an email from Bob which
in part said the tax cuts should never have happened
except for the most needy. A text responded by saying,
(00:30):
remind Bob, are rents not the lowest they've been for years?
Is that not a direct result of the tax clawback
for landlords? Well?
Speaker 1 (00:39):
Is that?
Speaker 3 (00:40):
Why?
Speaker 2 (00:40):
To discuss this, I'm joined by New Zealand Property Investors
Federation President Peter Ambrose. Very good morning to you.
Speaker 3 (00:47):
Good morning Carry.
Speaker 2 (00:49):
What is it? Why are rents falling? Is it this
simple fundamental that when supply outstrips demand, price is full?
Speaker 3 (00:59):
Absolutely, Carry. I think it's predominantly. That's the main reason.
It's way too much. I guess supply this is what
the demand currently is.
Speaker 2 (01:07):
And where is that supply coming from?
Speaker 3 (01:11):
Well, it's twofold. Obviously. There was quite a lot of
activity in the construction market leading up around twenty twenty one,
twenty twenty two, and those are coming into the market
well recently. But at the same time, of course, we've
seen job losses. We've seen a lot of kiwis leave
(01:31):
the country as well. Stats I've seen recently show that,
you know, in the last four years, Auckland population has declined,
Wellington population has declined, and then on top of that
there's a whole lot of new construction that's come to
the market. So I do I agree it's supplying demand predominantly.
Speaker 2 (01:51):
And so are some of the people who are rent
as accidental landlords because they're leaving to find work overseas,
not sure if they're coming back, so they'll rent out
their home to give themselves options or.
Speaker 3 (02:04):
Yes, yeah, that's definitely the case. We're seeing that we're
tribe to sell their family home. They can't because you know,
there's there's no one will we're willing to take that
property at the price they're advertised, and they've found a
job elsewhere, mainly Australia, I guess, so they put their
property onto the rental pool, which again adds adds to
(02:27):
the supply.
Speaker 2 (02:28):
It does, it doesn't necessarily mean that you're going to
get good landlords if you're only there because you kind
of have to be and don't really understand the job.
Because it is a job, isn't it.
Speaker 3 (02:38):
Oh, one hundred percent? Yeah, I mean it has. You've
got to treat it as a business because you're providing
you know, a quality hopefully a quality product that someone
wants to rent from you. I mean, we see in
New Zealand, I mean sixty percent of rental properties managed
by the investor or the landlord themselves, and forty percent
(03:00):
are around go to property managers to manage their property.
So if you have those who are leaving the country,
obviously they would hopefully use a property manager to manage
their properties and then that would be done more professionally.
Speaker 2 (03:14):
Yeah. Absolutely, did you see it, because I've had quite
a few texts, well, I've had about four or five
texts in the last half hour from people who said
they were badly bruised by the narrative around landlords when
labor was in when Jasinda a Dune said report any
bad landlords directly to me, they got out and just
(03:35):
put the houses up as airb's and b And they've
come back now into the market because it makes financial sense,
and because it isn't such a devisive narrative.
Speaker 3 (03:46):
Well, that's that's exactly right. I mean, it's not cool
to be a landlord was the way it was communicated.
But when you look at you know, providing private landlords
provides households for about six hundred and four thousand families,
so it's just significant amount. It was about thirty percent
(04:08):
thirty four percent rent in this country from private landlord.
So there are a lot of people that I guess
were didn't want to be associated as being a landlord.
Still providing quality accommodation for people, I mean it's not
just you know, the motivation to be a landlord can
be manyfold. It could be just to support your local
(04:31):
family and fine hour and just a legacy or fee
of grandmother or father or of relatives. And of course
the tax thing made it extremely difficult just to just
to survive in that environment when so much tax was
being paid for providing rent for accommodation, which of course
is exempt.
Speaker 2 (04:52):
When they when it was first announced, you know that
that you couldn't claim your expenses anymore. I didn't think
a lot of people told me on air that they
were going to get ou that they were going to
sell up their investment property, and that was that, you know,
they were getting out of the market. And I thought,
surely they wouldn't do that because the capital gains they'll
(05:13):
make on that property over time would surely offset the expenses.
But according to your records, did you keep records? It
appears that's exactly what happened. People said, all right, then, bug,
you will just sell the property and where off.
Speaker 3 (05:29):
And I think that was the case in some cases,
but I mean again, it's up to the everyone's got
a different situation. So there's a big difference between selling
your property, which you can tend to only sell once
and make one sort of either cement your loss or
some mental profit, versus being able to sustain that rental
going forward to provide accommodation on a weekly basis as
(05:51):
far as income and expenses is concerned. So if the
rent's not covering the simplest of things far as mortgage
repayments are concerned, then that has to be substituted from
another form of income, whether it be salary or wage
or other form of events. And then then it's a
conversation around while am I supplementing that sufficiently that if
(06:13):
I do get any capital gains, will I get that
back when I eventually do sell. But what we've seen
since twenty twenty one is property prices decrease significantly, and Wellington,
I'm very aware that you know some well some properties,
their new cvs are down thirty percent from what they
were in twenty twenty one. Now that's that's a significant number.
(06:35):
So yeah, so even if you're looking to sell, I mean,
are you going to be able to cover your mortgage?
I mean, that's that's that's the dilemma that some landlord's face.
So having a property rented it becomes sort of paramount
just to be able to survive in these in these times,
while just to make ends meets with rates, I mean
(06:56):
rates double digit increases, insurance and course maintenance, so none
of those prices, those costs go down. So yeah, so
it's very much some did who could if you like,
or if they've got if they had a few properties,
they might try to sell one or two to try
(07:17):
and get back to an equilibrium at least for cash flow.
But as a general almost most people sort of held
on for that reason. Just with the property prices going down,
then you know they weren't able to sell to at
least cover off their mortgage.
Speaker 2 (07:32):
God, you had the double whammy and Wellington too, didn't you,
with the job losses as well as the property devaluations.
Speaker 3 (07:40):
Well absolutely, and student numbers as well. I mean we
are a student city as well as public service, and
student numbers went down significantly as well. I mean they're
just starting to come back up again now, which is
which is good news. So hopefully you know, things improved
going forward.
Speaker 2 (07:56):
But they couldn't get much worse good then.
Speaker 3 (07:59):
I often think that, but what could possibly go wrong here?
At you?
Speaker 2 (08:04):
So do you think that that people who haven't got
the bottle, who haven't got the nerve, the sort of
part time investor, the ones have been seduced by the
ads that we play on our own station that if
you don't get an investment property, you're missing out. But
you know, do you think they are now either have
left the market or are going to steer clear of
(08:26):
investment properties as a way.
Speaker 3 (08:28):
Of look, I think it's a long term game that
you have to think about that. I mean, over over
a period of time, history has shown that property prices
tend to increase. It's mainly the land value of course,
because properties actually do depreciate and value if they need
to be maintained. Of course, if you look at your
own house, how often do you sort of need to
replace carved or the kitchen or so. So I think
(08:52):
it's got to be treated as a long term just
like any other investment, and you know, and you have
to be able to sustain the ups and the downs.
But I think, you know, there is definitely some people
that have sold out in some for a loss. I mean,
I know people have sold for a loss so they
can carry on with their life offshore or in another
(09:13):
part of the country.
Speaker 2 (09:14):
Lovely to talk with you. Thank you so much for
your insight. Peter Ambrose, President of the New Zealand Property
Investors Federation.
Speaker 1 (09:21):
For more from Kerry Wooden Mornings, listen live to news talks.
It'd be from nine am weekdays, or follow the podcast
on iHeartRadio.
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