The median rent level has dipped $5 a week to $295, according to a quarterly report on the residential rental market.
The record high reached for rents at the start of the year was $300 a week, Massey University's Real Estate Analysis Unit said.
The unit's director, Prof Bob Hargreaves, said the 1.6 per cent drop was somewhat unexpected because rents had been rising steadily last year and during the first months of this year.
However, on an annual basis, rents were still 5.36 per cent higher than in May last year.
Prof Hargreaves noted commentators believed a significant number of would-be vendors had taken their houses off the market and chosen to rent them out instead.
The 50 per cent fall in the number of houses sold compared to 2007 was reinforcing renting as the better option, he said.
"As house prices decline, renting may be a more attractive option for some households than buying. However, in the medium term, history shows buying is normally the most attractive option, particularly when the period of ownership is over five years."
Wellington was doing better than Auckland on the apartment front, with a median weekly rent for three-bedroom apartments at $600, compared with $435 in Auckland, possibly because of areas of oversupply there.
The median rent between the two cities was $288 per week in Wellington and $280 in Auckland.