While many urban centres in New Zealand have experienced rent stagnation or increase, new data in 2025 shows a surprising trend—rents are falling in select cities. These drops are a result of shifting migration patterns, government housing efforts, and post-pandemic demand recalibration.
For renters, especially young professionals and families, these affordable housing NZ 2025 zones offer a much-needed break. For investors, it may signal where returns are softening. Here’s a detailed look at the top 5 cities in New Zealand where rents are declining this year.
Top 5 Cities Where Rents Are Dropping
Here are the top 5 cities in New Zealand where rents are declining this year; have a look:
1. Invercargill
Located in Southland, Invercargill continues to top the list of cheapest NZ cities 2025. It has seen a 6% drop in average weekly rent due to low population growth and a surplus of available properties.
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Average weekly rent: $340
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Primary factor: Low tenant demand and increased housing stock
2. Whanganui
Rents in Whanganui have fallen by 5.2%, driven by migration to Wellington and Palmerston North. The city remains an attractive destination for remote workers and retirees.
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Average weekly rent: $365
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Notable trend: Young families seeking better cost-of-living conditions
3. Gisborne
Gisborne has recorded a 4.8% decline in rent, largely due to a cooling off in tourism-related demand and new housing developments easing supply issues.
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Average weekly rent: $375
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Highlight: Increased long-term rentals following end of seasonal contracts
4. Rotorua
After significant increases between 2020–2023, Rotorua rents have dipped by 4.1%. Investment has shifted to homeownership, reducing rental competition.
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Average weekly rent: $395
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Driver: Better mortgage-to-rent ratios attracting buyers over renters
5. Dunedin
The student city of Dunedin has experienced a 3.9% drop, attributed to reduced international enrolments and university housing expansions.
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Average weekly rent: $410
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Effect: Landlords offering discounts to fill vacancies
What This Means for Tenants and Landlords
For renters, the rent drop New Zealand 2025 offers a rare opportunity to renegotiate or upgrade living conditions without a steep increase. Meanwhile, landlords in these cities may need to enhance property appeal or offer added incentives to secure leases.
Affordable housing NZ 2025 is becoming more attainable outside Auckland and Wellington, especially as telework enables flexible living arrangements.
FAQs
Why are rents falling in these New Zealand cities?
Falling demand, government housing developments, and population shifts are the main drivers behind this trend.
Will rents continue to drop throughout 2025?
In select regional cities, yes. However, metro areas like Auckland are expected to remain stable or slightly increase.
Is it a good time to rent in these cities?
Absolutely. Lower rents combined with higher availability make 2025 ideal for securing better rental deals.
Do rent caps affect these drops?
While rent caps control increases, market-driven factors like demand and supply have a stronger influence in these cities.
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