Rental prices dropping, says real estate company

Rental prices are dropping as cash-strapped tenants downsize, crowd in with flatmates, or shift back home.

First National Real Estate says there is an oversupply of rental properties nationwide, reducing rent prices by an average of 3.5 per cent across the country. Its quarterly survey shows there is plenty of accommodation available, but not all of it is desirable.

The hardest places for landlords to get tenants are Waiheke Island, where one in five rental properties are vacant, followed by Ashburton and Whangamata.

Particularly difficult to fill this winter have been colder and older homes.

Property managers also say university flats are remaining empty as the recession bites, with many students either ceasing their studies or going to live with their parents.