Rental listings in Canterbury increased by 35 per cent in the three months to May with some property managers warning landlords they may need to lower expectations to meet the market.
Data from realestate.co.nz showed that while the number of rentals increased by 40 per cent across New Zealand over the last quarter, the number of rental seekers rose by just 2.5 per cent.
Notably, the website's data shows Canterbury listings were up 35 per cent, Auckland listings were up 40 per cent, and Wellington 56 per cent over the last quarter.
Trade Me data showed Auckland had 1450 additional homes for rent between 28 February and 28 May - a 41 percent increase in stock.
Ray White property manager, Shane Ryder, said it had been noticeably harder to rent out homes in Auckland since April.
"Back in February, to rent a property you just do one viewing, and then it will be rented, you would have quite a few people lined up at the door and you'd have a number of applications to choose from.
"And now is, you may only get one or two people coming to the viewing and you may get no applications, so you do another viewing, and then you do another view…so it could be four or five viewings, there are houses that are gonna take longer than that," he said.
Ryder said landlords needed to be realistic with expectations if they wanted their properties rented out.
"We've actually already introduced some properties where we've reduced the rent already to meet the market, we've already done that on a number of properties over the last month," he said.
A staff member of a major property management company, who did not want to be named, told RNZ he had to cancel half the viewings over the past month and a half, as not many people were registering.
Realestate.co.nz spokesperson Vanessa Williams said they had noticed a trend in landlords shifting to longer term rentals.
"It is a significant increase in rental stock, and anecdotally what we're hearing is that people are shifting away from shorter term rentals like Airbnbs and book-a-bach, and they're moving to longer term rentals due to the economic climate that we're in at the moment," she said.
Williams said New Zealanders appear to be travelling less domestically due to cost of living pressures, feeding into that shift.
She said if the trend continued, prices may come down.
"If we continue to see the oversupply of stock, the thing that will need to change will be price, so that properties can be rented," she said.
However, Williams added that the changes to the brightline test starting in July would have an impact on sales, which will in turn affect the supply of rentals.
"[That] will be our next telling piece," she said.
Zoning reforms, weak housing market contributing to more stock - experts
An economist researching zoning reforms, Ryan Greenaway-McGrevy, said upzoning in some major cities has enabled a construction boom.
He said new builds coming to fruition may be driving the increase in rental stock.
"The peak of that [consent] boom was roughly in 2022, and if you think about it it takes about one to two years for a consent to be converted into a finished dwelling, then comes to the market.
"So in places like Auckland, Lower Hutt and that Canterbury region, I suspect we're seeing the benefits of that construction boom flowing through," he said.
Infometrics' principal economist Brad Olsen said the weakness in the housing market could be the main factor contributing to the recent increase in stock.
"New data out today shows that house sales aren't actually going all that well, even though a lot of people have listed their homes for sale. If they're not able to make a sale, they may well be looking to rent their houses out more than they might before," he said.
Olsen said his analysis shows that the sharpest increase in rental stock happened in May, and it was too soon to tell whether this would become a trend.
Realestate.co.nz confirmed that the new listings in the month of May across New Zealand, was the highest monthly number since January 2021.
Meanwhile, the latest property report published by Trade Me showed the the national median rent in April 2024 remained at $650, unchanged from March.
Trade Me said it was the sixth time in the past year that rents remained flat from month to month.
