In these places, buying a home is up to 30% cheaper than renting!
Property reports for May are coming out, with several trends worth watching.
Over the past few days, several organisations have released their property reports for May. Here are some trends worth watching:
Auckland's property market has entered winter in 2019
Auckland's largest real estate agency, Barfoot & Thompson, sold 821 homes in May, at an average price of NZ$929,000. More than 1/3 of the homes sold for over NZ$1,000,000.
For comparison, 667 homes were sold in April this year, while 1027 were sold in May last year. Sales rose month on month but fell sharply year on year.
Barfoot & Thompson managing director Peter Thompson said: “With concerns about capital gains tax out of the way, Auckland home sales have been relatively stable. Although there is currently no sign of house prices falling, there is no sign of them rising either. This situation may continue until spring.”
New Zealand house price growth slows
Since Auckland house prices peaked in 2016, New Zealand's property market has seen prices ease slightly in Auckland while repeatedly reaching new highs in the regions.
However, QV's latest figures show that average house prices nationwide rose by just 2.3% in May, compared with 6.9% in the same period last year. In other words, Auckland house prices continued to fall slightly, while price growth in regional cities also lost momentum, reaching only 1/3 of the rate seen a year earlier.
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Auckland house prices fell 2.1% year on year, Christchurch prices were broadly unchanged, and Upper Hutt in the Wellington region recorded an annual increase of 14.7%.
Buying is 30% cheaper than renting in some regions
Real estate salesperson and data analyst Alistair Helm compared mortgage repayments for homebuyers with rent payments for tenants. He found that buying was more economical than renting in some regions, with savings of as much as 30%.
Helm assumed buyers would purchase a median-priced property with a 20% deposit and a two-year fixed mortgage rate.
Using April figures as an example, renting in Canterbury was 17% more expensive than buying. The local median rent was NZ$20592 a year, while annual mortgage repayments were just NZ$18000.
Renting was 30% more expensive than buying in Otago, 21% more expensive in Taranaki, 16% more expensive in Hawke's Bay and 20% more expensive in Manawatu/Whanganui. In Waikato and Nelson, renting and buying cost about the same.
In Auckland and Wellington, renting remained cheaper than buying, but the gap was narrowing considerably.
Auckland's median rent in April was NZ$561, or NZ$29172 a year, while buying meant annual mortgage repayments of NZ$32640. Although buying was 11% more expensive than renting, that figure was nearly 50% in 2015. In Wellington, renting was only 3% cheaper than buying.