The shift is especially visible in Auckland and Christchurch, where townhouse developments have flooded both the for-sale and rental markets.
BNZ Chief Economist Mike Jones notes a "townhouse glut" is driving vacancy rates up, with Auckland and Wellington seeing nearly 4–5% of rental stock sitting empty. Many of these properties were intended for sale, but softening buyer demand and high interest rates have pushed developers to rent them out instead - some even turning to Airbnb.
This oversupply may temporarily benefit tenants with more options and softer rents. However, experts expect some rental stock will return to the sales market once conditions improve. For landlords, it’s a reminder that new builds, especially townhouses, are reshaping the rental landscape and adding more competition.
