Cost crunch piles pressure on landlords

Rates went up 6.9% on average this year, almost double general inflation. Insurance is 31% more expensive than it was three years ago, and mortgage costs are heading up again after the Reserve Bank’s first rate hike in three years.

Meanwhile, the national median rent rose $5 in April – the first monthly increase all year, after five straight months of falls.

This is not a case for bigger rent rises, or a complaint about tenants. Costs are structural and largely outside a landlord’s control, and rent is capped by what the local market will bear (right now, that isn’t much). But there’s one lever landlords can still pull: how well a property is presented, and how quickly it re-lets when it needs to.

Rental listings down; enquiries up

Trade Me’s April data recorded the year’s first month-on-month rise in the national median rent – up $5 to $625 a week, though still $5 below where it sat a year earlier. The shift reflects a genuine supply squeeze: listings nationally were down 5% year-on-year, while enquiry-based demand was up 8%.

But any rebalancing reflected in prices takes time. Consider Auckland, where the median weekly rent fell $10 over the year to $660, even with an 11% jump in demand. Wellington fell $40 to $600, dragged down by a wave of public sector job losses.

Costs keep mounting

Council rates are rising an average of 6.9% nationally for the 2026/27 year, though some ratepayers face considerably more: Auckland’s 7.9% rise adds $320 a year to the average bill, and Dunedin’s 10.5% is the steepest of the main centres. Over the current three-year council term, rates nationally are up 34.4% against 13.7% general inflation. Clearly, council capital spending isn’t slowing down.

Insurance tells a similar story. The average house insurance premium sits at $2,949 a year, 31% higher than three years ago, though the pace of increase has finally slowed to around 2% over the past 12 months. And mortgage costs, as we covered after the Reserve Bank’s surprise 8 July hike, are on a path most bank economists now expect to keep rising through 2027.

Control the controllables

We’re at the mercy of rates, insurance premiums, and the OCR. But where landlords can exercise some control is over the number of days a property sits empty between tenancies, and what rent it achieves once occupied. This is where presentation, maintenance, and property management influence the outcome.

The current average time to re-let a New Zealand rental sits at around 22 days. Auckland-specific data tells a similar story: well-priced, well-presented properties in good locations are letting in 10 to 14 days, while overpriced or poorly maintained listings in outer suburbs are taking 30 days or more.

At the national median rent of $625 a week, the difference between a 12-day letting and a 30-day letting is 18 days of vacancy – worth around $1,607 in lost rent, before counting the letting fee a property manager typically charges to fill a vacancy in the first place. No rent increase a landlord could realistically ask for this year closes that gap.

Presentation in practice

List a property that’s genuinely ready: clean, well maintained, properly photographed, and priced to reflect its actual condition rather than an owner’s hope for what it might be worth.

None of this requires a renovation, necessarily. It means fixing what’s visibly broken before the first open home rather than after a tenant complains, paying for decent photography instead of phone shots taken in poor light, and pricing according to the property’s actual condition rather than what a neighbouring property achieved 18 months ago. Pet-friendly listings are also proving to hold tenants for longer, which matters as much as the speed of first letting.

This isn’t an argument against ever reviewing rent – a review still makes sense in a local market that is genuinely tightening. But for most landlords in most markets this year, money is better spent narrowing the gap between what a property is advertised at and what it can achieve quickly.

Costs keep rising whether a property is occupied or not. The only cost line over which a landlord has genuine control is the number of weeks their property sits empty.

Want a second opinion on how your property is presenting to the market? Call 0800 GOODWINS for a presentation and pricing review.