“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.