Rental Affordability Eases Nationally, But Regional Divides Persist, New Report Shows

A new regional rental affordability report released by Property Brokers and property research firm The Property Knowledge shows signs of improving rental affordability across New Zealand but warns that significant regional disparities remain.

The latest Regional Rental Affordability Index reveals the share of income spent on rent nationally has eased from 39 percent to 35 percent over the past year, reflecting a modest improvement for tenants.

However, the report highlights that housing pressures remain unevenly distributed across the country, with several regions still experiencing acute affordability challenges. 

Professor Graham Squires, Director of The Property Knowledge and lead researcher for the report, says the national improvement masks deeper structural differences between regional economies.

“Rental affordability across New Zealand continues to shift in ways that reveal deeper structural dynamics in both regional labour markets and housing supply,” Squires said.

“What stands out in this latest cycle is the broad, if modest, easing in rental pressure, with the national share of income spent on rent falling from 39 percent to 35 percent over the year.”

However, he said the improvement has not been felt equally across the country.

“Regions such as Gisborne, Northland and Hawke’s Bay remain under acute affordability strain, with households still allocating more than 40 percent of earnings to rent, even after year-on-year reductions,” Squires said. 

At the other end of the spectrum, regions such as Southland and the West Coast continue to show the strongest rental affordability, reflecting both lower rental levels and more stable local labour markets. 

The report also highlights that rental trends are increasingly being influenced by underlying economic conditions such as regional wages, industry composition, and demographic changes.

David Faulkner, General Manager of Property Management at Property Brokers, said the findings reinforce the importance of understanding local market dynamics when managing rental portfolios.

“From a management perspective, this latest update shows a rental market that is stabilising but still demanding close attention,” Faulkner said.

“The national improvement in affordability is welcome, yet the real story lies in how differently regions are tracking. Some markets, like Wellington, are showing early signs of renewed rental momentum after a quieter period, while others continue to feel the weight of constrained local economies.” 

The report notes that Wellington saw rental activity begin to strengthen again toward the end of 2025, suggesting the capital may be entering a new phase of market recovery after a softer period. 

Faulkner said property managers are increasingly having to consider the broader economic environment affecting tenants.

“What stands out operationally is the interplay between rents and earnings. Even where rents have softened, wage patterns, especially the pronounced gender and age-based earnings gaps, continue to shape tenant capacity and behaviour,” he said. 

The research also highlights significant income disparities across regions and demographics. Data shows earnings differences persist between genders across every region, with some of the largest wage gaps appearing in smaller labour markets where employment opportunities are less diverse. 

Professor Squires said these economic patterns ultimately influence how housing markets evolve.

“The persistent gender and age-related earnings gaps, particularly in smaller regions, underscore that affordability is not simply a housing story but a labour market one,” he said.

“As these disparities compound over time, they shape who can access which regions, and ultimately how regional housing markets evolve.”

The report also identifies seasonal and structural influences on earnings patterns across the country. For example, a dip in earnings during September 2025 was likely driven by temporary slowdowns in industries such as construction, agriculture and tourism as they transition between seasonal cycles. 

Despite these complexities, Faulkner says the broader trend suggests the rental market is gradually adjusting following several years of intense pressure.

“The convergence of rents across regions suggests a more competitive national market. Property managers will need to adapt quickly as affordability pressures shift and tenant expectations evolve,” he said.

The Regional Rental Report is produced by Property Brokers in partnership with The Property Knowledge and provides insights into rental affordability, wage trends and regional housing dynamics across New Zealand.