Investors plan 4.1% average rent rise, the highest in 13 months
New Zealand property investors are planning slightly larger rent increases, but a continued shortage of good tenants may limit how much they can achieve. The findings come from The Property Consortium's September 2026 Investor Insights survey of 247 investors with independent economist Tony Alexander (pictured).
Landlords expect to lift rents by an average of 4.1% over the coming year. That is a 13-month high, up from 3.9% last month and a low of 3.7% in May.
The share of investors planning any increase has also been edging up since late last year, though it remains well below the levels seen from 2021 to 2024. Alexander said part of the lift may reflect annual inflation rising from 2.7% to 4.1% over the past year.
Tenant shortage caps rent ambitions
Tenant availability remains the main constraint. A net 30% of landlords said it is still difficult to find a tenant they want, although that difficulty has been easing slowly since the start of the year. It worsened slightly this month, however, from a net 27% in August, which was the least difficult reading for tenant conditions since May 2025.
"Actual rent rises may therefore not be as achievable as some investors are thinking," Alexander said.
He does not expect tenant sourcing to become easy any time soon, with population growth low and dwelling supply increasing. Annual net migration has improved to about 20,000, from roughly 9,000 a year ago, but that is still well short of the 10-year average of 46,000.
Banks ease, but investors still lean towards selling
For advisers, the survey suggests lenders are more willing to lend than investors are to borrow. More investors describe their bank as accommodating than restrictive, a pattern that began in mid-2024.
Alexander said feedback from mortgage brokers shows banks are still slowly easing their lending criteria for investors, while overall demand for credit remains on the low side.
Some 14% of respondents are thinking about buying another property in the next 12 months, while 34% are considering selling, up from 32%. On a net basis, 20% plan to sell, up from 17% last month but down from 23% two months ago. Alexander said net selling intentions may have peaked earlier this year.
Costs and policy top the worry list
Council rates and insurance remain landlords' biggest concerns, while maintenance costs, further house price falls, and rising interest rates also weigh on returns. Borrowing costs are already rising: the Reserve Bank (RBNZ) lifted the official cash rate (OCR) to 2.75% on 2 September, its second increase since resuming tightening in July, with the next review due on 28 October.
Worries about losing interest deductibility again have risen since late last year. Alexander said they should ease now that Labour has promised not to remove deductibility if elected.
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