NZ Rental Affordability Improves While Australia Heads Deeper into Rental Stress

David Faulkner | Property Management General Manager | Property Brokers

New Zealand’s rental affordability is improving across much of the country, while Australia is

heading further into rental stress, according to the latest Regional Rental Affordability Index

released by Property Brokers and The Property Knowledge.

The June 2026 report shows rental affordability has improved across nearly every New

Zealand region over the past year, driven by easing rents and rising incomes. Nationally,

rents now consume 39% of earnings, down 5% year-on-year.

Hawke’s Bay recorded the strongest improvement in rental affordability nationally, with

affordability improving by 9% year-on-year, while Wellington, Bay of Plenty, Northland and

Canterbury also experienced notable easing in rental pressure.

At the same time, Australia is moving in the opposite direction, with rents rising faster than

wages across both major cities and regional centres.

Property Brokers General Manager of Property Management, David Faulkner, says the

comparison between the two countries highlights the significant role policy settings can play

in rental affordability outcomes.

“The gap between New Zealand and Australia on rental affordability is narrowing, but the

direction of travel for each country could not be more different,” says Faulkner.

“In New Zealand, we’re seeing broad improvements in affordability, driven by easing rents

and rising incomes. Australia, meanwhile, is heading into deeper rental stress, with rents

rising faster than wages across both capital cities and regional markets.”

The report notes that Hawke’s Bay experienced the largest drop in weekly rents nationally,

falling by $53 year-on-year, while Wellington rents fell by $42 and Taranaki by $29.

Nationally, weekly rents are down $13 compared to the same period last year.

Meanwhile, average monthly earnings increased across every region in New Zealand, with

Otago recording the strongest annual wage growth, rising by $844 year-on-year.

Faulkner says New Zealand’s recent policy changes around interest deductibility appear to

be helping stabilise the rental market.

“When landlords are unable to offset interest costs, those costs don’t disappear; they are

absorbed into the rental market,” he says.

“The restoration of interest deductibility has coincided with softer rents and increased rental

stock availability. While there are always multiple factors influencing the market, the timing

suggests investor confidence and supply have improved.”

The report also compares New Zealand and Australia against the wider OECD, finding that

both countries continue to sit above the OECD average for rent burden, reflecting ongoing

structural pressures related to supply, population growth, and housing demand.

Professor Graham Squires, Director of The Property Knowledge, says the data shows New

Zealand’s rental market is beginning to rebalance.

“New Zealand’s rental affordability continues to improve, with easing rents and rising

regional earnings reducing rent-to-income pressures across much of the country,” says

Squires.

“This marks a clear shift toward a more balanced market, even though affordability remains

tight in regions where supply constraints persist.”

The report combines rental data, income statistics and international housing affordability

comparisons to assess rental pressure across New Zealand, Australia and the OECD.