Soaring Auckland rents driving more people to buy, says real estate boss

“Despite huge asking prices, buying a house in Auckland for many people is now looking more attractive than renting given soaring rents and falling interest rates,” says Geoff Barnett, National Manager of Century 21 New Zealand.

His comments follow a media statement by Trade Me Property today that shows median asking rents in Auckland have rocketed up more than eight per cent on a year ago. Aucklanders are now looking at $499 per week for a typical property, taking annual rent costs close to $26,000 – about $2,000 more than a year ago, claims Trade Me Property.

Mr Barnett says following Reserve Bank cuts to the Official Cash Rate in June, July, this month, and possibly again on 29 October, the cost to service a residential bank mortgage is falling.

“At the moment with interest rates around 5%, if you have enough equity and can borrow $500,000, then that will cost you about $25,000 a year to service or about $480 a week in mortgage repayments. That’s cheaper than rent for many people.

“In many cases it’s even better than that with home buyers now locking in the likes of 4.35% interest rates if they can stump up 20% equity. What’s more interest rates in the coming months are probably only going to fall further, making buying not renting increasingly attractive.

“The good thing about buying in Auckland is you’ll get some solid capital gain over time. In some cases it has proven to be much as nearly 20% a year which is a great way to build equity and lessen your mortgage debt and living costs over time.”

Mr Barnett says Century 21 agents are generally getting more enquiries from young couples and single people who are now doing their sums and realising buying, even if it means longer commuting times, is still attractive despite Auckland house prices continuing to rise.

“At Century 21, we expecting a busy summer as falling interest rates and soaring rents help convince people out of renting and into buying,” says Geoff Barnett.

International real estate agency business Century 21 has 20 offices in New Zealand, over 250 offices in Australasia and over 7,500 offices in 80 countries worldwide. Its global websitewww.century21global.com has listings from all over the world that can instantly translated into 16 languages.

ENDS

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