New Zealand rental affordability improves, but regional differences remain significant
Wednesday, 11 March 2026
New rental report reveals where New Zealand tenants spend the most of their income on rent
Rental affordability in New Zealand has shown signs of improvement over the past year, offering some relief to tenants after several years of rising housing costs. However, our latest regional rental report analysing rental trends across the country reveals that the benefits are far from evenly distributed.
The latest Regional Rental Affordability Index highlights that while overall rental pressure has eased nationally, significant regional differences remain. These variations are driven by local wage levels, industry structures, and broader economic conditions.
Understanding these trends is important for renters, landlords, investors, and property managers alike as the New Zealand rental market continues to evolve.
Rental affordability improves nationally
According to the latest Regional Rental Report, the proportion of income spent on rent across New Zealand fell from 39 percent to 35 percent between December 2024 and December 2025.
While this represents a modest improvement in affordability, the national figure only tells part of the story.
Rental affordability is typically measured by the percentage of household income required to cover rent. When this share rises above 30 percent, housing is generally considered unaffordable by many international standards.
Despite the recent improvement, many regions across New Zealand remain well above this threshold, meaning housing affordability remains a key challenge for many households.
Regional rental affordability varies widely
One of the most striking findings from the report is the extent of regional variation across the country.
Some regions continue to experience significantly higher rental pressure than others.
For example:
- Gisborne remains one of the least affordable regions, with households spending around 42 percent of their income on rent.
- Northland and Hawke’s Bay also remain under considerable affordability pressure.
- In contrast, Southland and the West Coast remain among the most affordable rental markets in the country.
These differences highlight the impact of local economic conditions on housing affordability.
Regions with lower wage levels or limited employment opportunities often experience greater affordability pressure, even if rental prices themselves are lower than in major centres.
The relationship between wages and rent
The report emphasises that rental affordability is influenced not only by housing costs but also by the earning capacity of local populations.
In many parts of the country, wage growth has struggled to keep pace with housing costs over the past decade. Even when rents stabilise or decline slightly, affordability can remain constrained if earnings growth remains limited.
The report shows that high-income regions such as Wellington continue to maintain a structural advantage due to stronger labour markets and higher value industries.
These factors contribute to stronger earning potential, which helps offset higher rental prices.
By contrast, regions with smaller economies often rely on industries with lower average wages, such as retail, tourism and hospitality. These sectors tend to offer lower and more variable income levels, making rental affordability more challenging for many households.
Wellington showing signs of rental recovery
The data also reveals interesting trends in specific regional markets.
Wellington, for example, experienced a period of softness in its rental market before showing signs of renewed momentum toward the end of 2025.
This rebound may reflect changes in population flows, employment conditions, and housing supply in the capital.
For property managers and investors, this type of regional shift highlights the importance of closely monitoring local market dynamics rather than relying solely on national trends.
Seasonal patterns influence rental affordability
Another important factor influencing rental affordability is seasonal employment patterns.
The report identifies a noticeable dip in earnings during September 2025, which was likely linked to seasonal slowdowns in several major industries.
For example:
- Construction activity often slows before the spring building season begins
- Agriculture sits between peak production cycles
- Tourism and hospitality experience a lull between winter and summer demand
These temporary shifts in employment hours and income can influence affordability measures at different times of the year.
Understanding these seasonal patterns helps explain some of the fluctuations seen in rental affordability data.
Gender and age income gaps affect housing access
One of the most important structural issues highlighted in the report is the persistent gender pay gap across regions.
In every region analysed, male earnings were significantly higher than female earnings.
The report shows the largest wage gaps tend to occur in smaller regional labour markets where job opportunities are less evenly distributed across industries.
In some regions, such as the West Coast, Tasman, and Taranaki, the gender earnings gap exceeds 40 percent.
These disparities have important implications for housing access, as lower earnings reduce the ability of some groups to afford rental accommodation.
Age also plays a role. Younger workers and those nearing retirement tend to earn less than workers in mid-career stages, which can influence their housing choices and affordability.
Industry mix shapes regional affordability
Another factor influencing regional affordability is the type of industries present in each area.
Higher-paying sectors such as mining, financial services, and energy tend to cluster in particular regions, providing stronger earning potential for residents.
Meanwhile, service industries such as retail trade and accommodation services show relatively low wages across all regions.
Because these sectors are widespread and employ large numbers of people, they place structural limits on income growth in many regional economies.
These structural differences between regions help explain why rental affordability varies so widely across New Zealand.
What this means for landlords and property managers
For landlords and property managers, the findings reinforce the importance of understanding local market conditions.
Rental demand, tenant affordability, and portfolio performance are increasingly shaped by broader economic trends such as employment patterns and wage growth.
In some regions, improving affordability may support stronger tenant stability and reduced arrears risk.
In others, ongoing economic challenges may continue to influence tenant turnover and rental demand.
Property managers therefore need to remain adaptable and responsive to these evolving conditions.
A rental market adjusting to new conditions
Overall, the latest data suggests the New Zealand rental market may be entering a more balanced phase following several years of significant disruption.
While affordability pressures remain in many regions, the modest improvement recorded over the past year indicates that rents and incomes may be beginning to move into closer alignment.
However, the report also highlights that the underlying drivers of housing affordability extend far beyond housing supply alone.
Regional labour markets, wage growth, industry composition, and demographic trends all play a critical role in shaping housing outcomes.
For policymakers, investors, and communities, understanding these connections will be essential in addressing the long-term challenges of housing affordability in New Zealand.
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