To rent or buy - that is the question
Page 1 of 2 .........5:00AM Saturday March 08, 2008
By Maria Scott
As mortgage rates rise again, the property ladder will be pulled yet further away from some aspiring owners, at least for now. The good news is that, for many, the cost of renting is substantially lower than the cost of purchase.
Average weekly rents in the Auckland region were $325 and $423 for two- and three-bedroom properties respectively in January, the latest research from property agent Crockers shows. That works out at $16,900 and just under $22,000 a year.
The median price of an Auckland home in January was $432,750, according to the Real Estate Institute of New Zealand. At that price, a purchaser needing a 90 per cent mortgage would require a loan of just under $389,500. At today's mortgage rates of around 10 per cent, the cost would be nearly $38,950 a year, leaving little change out of $750 a week. That is before any principal is repaid on the loan or the owner pays for insurance, renovation or maintenance.
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