Tenant shortages emerge amid cooling NZ rental market
A growing number of New Zealand landlords are reporting difficulty securing tenants, according to the latest Investor Insight survey by Crockers Property Management and economist Tony Alexander (pictured).
“A record net 33% of landlords are now finding it hard to get a good tenant,” Alexander said. “A year ago, a net 14% found it easy,” the report noted, marking a significant shift in market conditions.
The survey, which received 296 responses, also revealed that, for the first time since late 2023, being without a tenant has become one of landlords’ top three concerns - alongside insurance and council rates.
The findings come as New Zealand’s rental market continues to cool, with national median rent down 3.1% year-on-year. Rents fell 0.8% in March and April, while supply remains high, giving tenants more leverage.
Buying interest rises despite challenges
Investor intentions to buy residential property lifted this month, with 22% of respondents saying they plan to purchase within the next 12 months, up from 14% last month.
Net selling intentions also eased, dropping from 18% to 12% - the least negative result since January.
“Most media articles have been about flat house prices with declines still occurring in many locations,” the report said. “There has been no sign of a surge in tenant numbers.”
Holding intentions stabilise after 2023 shift
When asked how long they plan to hold their investment property, most landlords continue to signal long-term ownership. The proportion planning to hold for 10 years or longer has not shown any fresh structural change since mid-2023.
The decline in interest rates since mid-2024 has yet to reverse the downward trend in holding durations seen during the rate hikes of 2023.
Preference for existing homes strengthens
Among those looking to buy, 72% indicated a preference for existing properties, slightly down from 76% last month but well above the early 2022 low of 46%.
The share of buyers interested in new builds or development continues to trend down after three years of decline.
Rent increase plans at record low
Only 47% of landlords said they plan to raise rents in the next six months - down sharply from 80% a year ago and the lowest figure recorded in the survey’s history.
Planned rent hikes averaged 4.4% this month, slightly up from 4.2% last month but well below the 5.4% average a year ago.
Bank sentiment turns slightly positive
Investor sentiment toward banks has improved, with a net 7% reporting their banks are becoming more accommodating - up from a net -4% a year ago.
This reflects a softening credit environment and possibly improved debt management support from lenders.
Investor concerns evolve
While insurance and council rates remain key worries, concern over tenant vacancies is rising fast.
Other concerns such as falling house prices, tenant regulations, and weak migration are creeping upward, while worries about rising interest rates have largely dissipated.
“Broadly, since 2023, landlords have rated three things as their greatest concerns—insurance, rates, and maintenance costs,” Alexander said. “Now, for the first time, being without a tenant for a while has entered that top tier.”
