Rental prices lag behind the costs of running a rental home

Author: Michael Sergel,
Publish Date: Wed, 22 Jul 2026, 5:00am

A landlord advocate says some rental property owners may consider selling up, as rental prices continue to lag behind the costs of owning and running a rental home.

Latest Stats NZ data shows “actual rentals for housing” costs have risen about 0.5% in the past year, the lowest increase since 2001.

Property-associated costs rose more sharply over the same period, with council rates and payments increasing 8.8% across surveyed areas in the year.

The Stats NZ data shows estimated rent costs have increased 35% in the past decade, while estimated council rates and payments have 86.9% over the same period.

Cotality analysis of Ministry of Business, Innovation and Employment (MBIE) data shows national median rents began falling two years ago, the first decrease since the Asian financial crisis and Global Financial Crisis periods.

Lower net migration had limited demand for rentals, Wellington had seen a significant decline in rental demand and housing affordability had almost reached a record high.

Property Investors’ Federation advocacy manager Matt Ball said low rent inflation was a good thing, but the discrepancy between rents and costs would have an impact.

“Rates are going up continuously, insurance went up a lot, interest rate rates were high although they’ve dropped back, and maintenance costs continue to go up.

“It’s difficult, and for some people it might be too difficult and they’ll leave the business. For others, they’re managing and they just have to keep costs down as much as they can.”

Finance Minister Nicola Willis said the historically low rent inflation was positive news.

“It is very meaningful for many New Zealanders who are renting, including those who are saving to purchase their first home, which we are seeing in larger numbers than has previously been the case.”

Ball said rates increases were now one of the biggest issues facing many landlords.

“People don’t think of rates in terms of rent, but if you look at Auckland’s 7.9% rate increase recently, that’s the equivalent of, half a week’s rent. That’s the pressure that is being put on rents.

“Of course, because of the supply and demand situation, landlords can’t recapture that cost.”

Willis said the Government’s proposed rates cap would go some way to addressing that impact, and has criticised Labour for not taking a position in favour of rates caps.

“We do not accept that the level of rates increases that New Zealanders have had to put up with in recent years is acceptable and we are acting to prevent that in future.”

While Labour leader Chris Hipkins said Labour was yet to take a position on rates caps, the party’s finance spokesperson Barbara Edmonds said the Government was yet to provide adequate detail.

“Where is the legislation for it? They announced it last year, there’s still no detail.

“We only have eight sitting weeks left to go. I doubt they’ll be able to pass any sort of rates capping legislation between now and when the House rises.”

Michael Sergel is Newstalk ZB’s business reporter. He’s been covering business, politics, local government and consumer affairs for over a decade.