From the MBIE site:

Landlords decide rent reviews

The law doesn’t limit the amount of a rent increase, but does say how it must be done, and that it must be no more than annually. What can be done if the tenant doesn’t agree with the new rent amount is also stipulated.

If a landlord is charging significantly more than for other similar properties, the Tenancy Tribunal could make an order for it to be reduced. The tenant will need to provide evidence that their rent is substantially higher than rent for other houses in the area similar to the one they’re renting.

A landlord and tenant can agree to an increase of the rent (outside of the usual 180-day period) if the landlord has:

  • improved the property, which increases its value and benefits the tenant
  • improved facilities or services provided to the tenant
  • changed the tenancy agreement to benefit the tenant.

A landlord or a tenant may apply to the Tenancy Tribunal to review the rent increase if:

  • the tenant doesn’t agree to increase the rent when the landlord has improved the property or changed the tenancy agreement to benefit the tenant
  • the landlord has had unforeseen expenses since the rent was last increased.

If the Tenancy Tribunal increases the rent for these reasons, this doesn’t change the date the rent is normally reviewed or increased by the landlord.

Landlords and tenants should keep in contact with each other and discuss any possible changes to the amount of rent at an early stage.

My interpretation

The market decides what a rent is and landlords can only meet the market subject to their property quality, location and size.

Jonette 2011