Average rents are easing as an oversupply of residential properties put pressure on the market.
First National Group, which manages around 6500 rental properties in this country, said rents were down by an average 3.5 percent in the past three months.
Its quarterly property managers survey last week showed typical winter rental market conditions were exacerbated this year by the economic downturn.
First National general manager John Stewart said apart from a few pockets, supply continued to outstrip demand providing plenty of choice for tenants.
Some areas had double the usual rental supply, although a general shortage of quality rental property was noted, he said.
Property managers were reporting more tenants downsizing, reducing work travel distances or moving into shared accommodation due to tight economic conditions.
Demand for lower end properties was helping stabilise rents but First National was seeing new tenancy reductions of up to $50 a week for higher end properties in some areas including Auckland, Coromandel, the Bay of Plenty and Christchurch, Mr Stewart said.
Places most difficult to get tenants in the past three months were Waiheke Island, which had a vacancy rate of 21 percent, followed by Ashburton at 18 percent and Whangamata at 14 percent.
Rent reductions for new tenancies in those places were up to 7.5 percent to 10 percent a week.
Tenant demand was strongest on the West Coast, which had a vacancy rate of 0.5 percent, Taupo with 3 percent, and Taranaki with 3.6 percent.
As usual in winter, colder and older homes were difficult to fill, with warmer, drier properties being let quickly, Mr Stewart said.
Economic conditions meant unless people were downsizing or relocating for a job, they were choosing to sit tight rather than incur additional costs associated with moving.
Some metropolitan offices reported increasing numbers of tenants calling in to announce they had lost their jobs and could not pay rent for a week or two.
Of anecdotal interest were university and polytech-tenanted properties falling vacant at the end of the first semester recently and not being picked up for the new term.
"Perhaps more students are either ceasing their studies or moving home to mum and dad," Mr Stewart said.
With a shortage of listings of houses for sale and a supply of buyers, landlords might do well to consider selling as first home purchasers continued to dominate real estate activity.
First National said residential vacancy rates were static or increasing in Auckland, which had vacancy rates in the past three months of over 9 percent on average, while rents were down an average of 5 percent.
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