Jenee Tibshraeny: NZ Herald Wellington business editor on rents rising at their slowest rate in 25 years

Recent data has unveiled a silver lining in the latest June-quarter inflation figures.

Rents rose at their slowest rate, annually, in 25 years, according to Stats NZ.

The country’s stock of rents rose by 0.5 percent between the June 2025 and 2026 quarters, continuing the trend of softening increases that began towards the end of 2024.

NZ Herald Wellington business editor Jenee Tibshraeny explained further.

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Episode Transcript

Speaker 1 (00:00):
I've got some good news for you. Rents have risen

(00:02):
at the slowest rate in twenty five years. Stats New
Zealand says they increased point five percent zero point five
percent between the June twenty five and June twenty six quarters,
which is basically a trend that we've seen since the
end of twenty twenty four. The Herald's Wellington Business editor
generative trainees across this and is with us I, Jena
hi Heaver, what's driving this really slow rent increase?

Speaker 2 (00:26):
Well, according to Cotality chief economist Calvin Davidson, he reckons
it's just good old classic supply and demand. So the
supply of rentals has gone up in recent years. Meanwhile
demand has gone down. He thinks that's largely because immigration
has been weak, So, you know, so basically more houses

(00:46):
for fewer people wanting the houses. Now, you know, there've
been so many different changes in the property landscape recently.
If you think of how interest rates have fluctuated dramatically.
We've had since the COVID period, different changes in LVR
rules from the Reserve Bank and changes of government with
in terms of you know, being able to no longer
deduct interest as an expense when paying tax, and now

(01:08):
you can do that again. So we've got all this
sort of noise in the background. That's all influencing, influencing
the property market. But Calvin Davison reckons it's good old
supply and demand. So in his view, if if people say,
look if if costs that landlord's face, if they go up,
rent rent is going to go up, he thinks that's

(01:31):
not quite true because you know, even if if a
landlord's costs have gone up, they can only rent out
of house affairs demand. So that kind of puts to
bed some of the debate around some of these policy changes.
Because of course, at the moment, landlords don't have a
great time really either with those council rates being high,
insurance is still pretty high, and interest rates aren't super

(01:53):
low either, so you know, it's not a great time
for a landlord either.

Speaker 1 (01:57):
No, do you think that it will continue this trend?

Speaker 2 (02:02):
Well, according to Calvin Davidson and also Tony Alexander, they
reckon things have kind of bottomed out, and if you
look at some of the surveys that Tony Alexander has
done of property owners, there has been a bit of
a shift. So you know, for example, in terms of
the portions of landlords who think they can increase rent

(02:24):
and the portions who say they're struggling to get tenants,
that is starting to shift. So it's becoming a bit
more kind of landlord friendly, but not at any great rate.
And I think, you know, we're really seeing that in
the property market as well. Things may be atturning a corner,
but hardly, hardly much. I think that the property investors

(02:46):
will be worried if there's a change of government. The
capital gains tax is the one that gets a lot
of attention, but really, if property investors can no longer
deduct interest as an expense, that's a big one that
effects cash flow.

Speaker 1 (03:01):
Have we got an answer from Labor on.

Speaker 2 (03:03):
That no, we don't, And I keep asking them because
I think that's a huge policy that would affect cash flow.
And you could argue that if it's so unattractive to
become a property investor, you know, you could have fewer
rentals on the market, which could then put rents up
that way, that's one argument you could make.

Speaker 1 (03:23):
Explain, I wouldn't you carry on?

Speaker 2 (03:26):
I wouldn't be surprised if Labor prevented interest deductions, but
not entirely, more like fifty percent. So they said you
could deduct some of your interests, but not all of it.

Speaker 1 (03:35):
That's so, why are they not being full, you know,
forthright about it right now? Is it because they're saving
this up for later or are they just not sure themselves.

Speaker 2 (03:43):
That's a good question and I don't know the answer
to that. Yeah, it's a yeah, it's a good question.
I think that'll be huge news because if you are
worried about a capital gains tax, you know that that
tax is only on the gain, but with interest deductive ability.
If you know, if you are a landlord and you
have high expenses every month and then you can't deduct

(04:07):
the interest as an expense every year, that does make you, know,
being in that position quite a lot harder. You know,
you really need capital gains or something to make that
an attractive investment. At that point, you need something, Thank
you very much.

Speaker 1 (04:23):
Make appreciate it, you know. Tips raining The Herald's Wellington
Business editor. For more from Heather Duplessy Allen Drive, listen
live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio.