Renters hit mortgage calculators

File photo.

“Many renters doing their sums are pleasantly surprised. With rents up nationwide, but interest rates relatively low, plenty are discovering that servicing a mortgage can still cost less than paying rent,” says Tim Kearins, Owner of Century 21 New Zealand. 

Kearins’ comments follow Trade Me recently releasing its latest Rental Price Index.

It revealed the national median weekly rent listed on the site was $560, up eight per cent on the same time last year. North Shore was Auckland’s most expensive district at $650.

“With not as many Auckland houses going under the hammer in such a frenzy, this summer could prove the best chance in many years for renters to achieve home ownership.

“First-home buyers will of course need a sizable deposit and prove their ability to service a mortgage. They’ll be assured, however, of solid long-term capital gain helped by Auckland’s unrelenting population growth,” he says.

Trade Me’s latest Rental Price Index also showed the national rental market supply dropped by six percent last month.

Demand, on the other hand, increased by one percent year-on-year, putting added pressure on the rental market and tenants.

“This summer could be the sweet spot for property buyers and selling alike. Afterall, we all know lending will only get tighter and more expensive, while plenty of uncertainty hangs over 2022,” says Kearins.

The Century 21 leader says more families, young couples, and single people can see it makes a lot of financial sense to get on the property ladder soon rather than later, locking in a great interest rate.

“Admittedly, many Auckland first-home buyers have to leave their more central rentals to buy further out in the likes of South Auckland. However, with more people working from home and with many employers showing greater flexibility, Auckland commuting is arguably less onerous than it has been for some years,” he says.

He says with rental housing stock in hot demand and rental returns strong, potential ‘mum and dad’ property investors should also consider this summer as a good opportunity to become much-needed landlords.

“Our agents at Century 21 are now achieving good listings and seeing strong interest. Notably, the next Official Cash Rate announcement is on 23 February, which may lead to interest rates going up again. Rest assured, in the coming weeks many renters will be hitting those mortgage calculators,” says Kearins.




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2 Comments

It does seem....

Posted on 04-01-2022 18:10 | By groutby

.....like an interesting ’take’ on the rental vs ownership debate, particularly when you need such a high deposit and interest rates set to rise in the near future. Longer term well yes the value of the property all being well for the owner will increase, but probably at a far lesser rate than experienced over the last year or two..( mid you, that’s always up for debate...the market will decide that one)..and the need to service the principal interest alone may well exceed the rental cost, let alone being responsible for upkeep, rates and other associated costs... It would be great if this were true and I notice the Auckland market was cited in the article which I would have thought possibly amongst the most difficult market to get a home ownership ’foothold’ in?...I am skeptical though, but then not being in ’the industry’, perhaps I’m missing the point....

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Posted on 02-01-2022 07:26 | By Thats Nice

It would have to be a VERY low cost property to be able to afford a mortgage for a 1st home buyer now with the new rules applied. You now have to have a higher income and a higher deposit plus the interest rates have climbed several times recently. With higher house prices, the 1st home buyer in priced out of the market.

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