Auckland rents hit another record as mortgage rates fall further, strengthening the consensus that buying beats renting

Auckland’s weekly rent is approaching 600 New Zealand dollars

According to the latest report from well-known real estate company Barfoot & Thompson, Auckland’s average weekly rent reached a record NZ$595 by the end of 2020. The figures are based on actual rents, covering both existing and new tenancies, across 16500 Auckland residential properties managed by its property management operation. Director Kiri Barfoot said: “We had long expected the residential rental market to pass the NZ$600 weekly rent threshold in 2020. Although lockdown and its effects restrained rent increases to some extent, recent new tenancies show that momentum has continued.” Average rents rose across the board, particularly after the rent freeze ended in late September.

By the end of December 2020, Auckland rents had risen 2.1% compared with the same period in 2019, equivalent to about NZ$12 more per week or NZ$624 per year. Rents for three-bedroom homes—the most popular type and the usual market benchmark—rose 2.6% year on year.

Repeated mortgage rate cuts make buying more attractive than renting

While rents continue to rise, New Zealand’s major banks have repeatedly cut mortgage rates. Westpac, which led the way after New Year by lowering its one-year fixed rate to 2.29%, explained through a spokesperson: “Our special home loan rate at the same time two years ago was 4.15%. That meant a NZ$500,000 mortgage over 30 years required fortnightly repayments of NZ$1,119. At today’s rate, the same loan requires only NZ$885 per fortnight, saving NZ$6084 a year.”

On one hand, buying a home provides an appreciating asset, with weekly repayments potentially below rent. On the other, house prices keep rising and available properties are increasingly scarce. At the start of the year, economists offered their forecasts for the 2021 property market, generally expecting prices to rise another 13%–16% over the coming months. Buying rather than renting, and buying sooner rather than later, has become the consensus among those needing a home to live in. Dreams are worth having, but making them come true is not so easy.

ICBC (New Zealand) launches a Chinese New Year special

High house prices and limited supply are discouraging increasing numbers of first-home buyers. Many Chinese people hoping to buy in New Zealand also face the challenge of understanding local banks’ lending policies and requirements so they can obtain a loan more easily. As one experienced Chinese lending specialist explained, he decided to establish a Chinese mortgage business after seeing too many Chinese applicants fail to secure bank loans because of cultural differences and language barriers. 

Today, however, lending services from a Chinese-owned bank are readily available in New Zealand. Industrial and Commercial Bank of China (New Zealand) is the only Chinese-owned bank in the country with branches offering a full range of services, including personal everyday transaction accounts, savings, term deposits, dual-currency debit and credit cards, and residential mortgage finance. Its personal home loan service has been operating for 7 years, earning a strong reputation in the Chinese community for professional, attentive service.

Chinese New Year is the most important festival for Chinese people worldwide and a time for families to reunite. As Chinese New Year 2021 approaches, Industrial and Commercial Bank of China (New Zealand) has launched a special personal mortgage offer to help more Chinese New Zealanders realise their dream of owning a home:

From 1 February 2021 to 12 March

One-year fixed mortgage rate: 2.25%

18-month and 2-year fixed mortgage rate: 2.35% 

Industrial and Commercial Bank of China (New Zealand)

• A major banking brand familiar to and trusted by Chinese people;
• Lending staff who share your language and cultural background, making communication easier;
• More favourable interest rates than mainstream local banks;
• Chinese-language online and mobile banking to help you manage your accounts and loans easily.

As buying a home becomes increasingly difficult, why not seek out more convenient, better-value lending services that suit your needs?