Has it really now become impossible to own your own home? I can’t ever see me being able to afford one, even though what I pay in rent each month would more than pay a mortgage. It’s such a shame having to give hard-earned money to a landlord, but it seems that being able to raise enough for a deposit if you don’t have Kiwisaver or enough savings has raised the bar just that bit too high. Any tips or ideas?
Personally, I’m a Renter for Life.
I bought a house about 5 years ago and consequentially sold it about 6 months ago. Home ownership isn’t for me.
Here’s a useful website that I often read; http://www.interest.co.nz/property/rent-or-buy
I’m pretty sure they update the page every month. Interestingly, from their analysis it’s currently better to rent than buy…it’s said that for a while now.
What are your reasons for wanting to own a home? Are they purely financial?
Thanks for the reply, very useful info at that website.
My reasons for wanting to own a home are mainly for security - I have had houses sold out from under me before and had to scramble to find another suitable property, and the rents are getting higher and higher. Hard to manage financially if you are paying a large chunk of your fortnightly salary out in rent.
I will ponder on your words and the advice on the website - maybe I am better off staying a renter!
Owning a home or renting… mmmh! We’ve done both in the last 12 years and in my opinion, owning a home has a certain charm that renting just doesn’t.
We’ve been renting for the last year & a half and the restrictions around pets, inspections, sub-contractors, mowing someone else’s lawn, and of course paying rent are a bit much for us to handle.
The freedom with owning our own home is something that we have really missed. I’m not saying that it’s always easy. Even if it’s a place that doesn’t have all the amenities & facilities we want, we can still call it our own (of course depending on how much is left on our mortgage :-).
We can’t wait to go back on the home owner journey again!
I have been in NZ for 24 years now and have always been a renter. Got a wife and family and though there is the security of owning your own home and the ability to decorate as you like, the freedom of renting has allowed us to move freely and often.
We are an ever evolving community now and often you have to go outside your comfort zone to have what is best for your family.
At the end of the day, you do what is best for your own circumstances and to me there is no right or wrong answer here.
I’m a home owner. I paid almost double what my neighbour paid for her house, I’m just glad I was able to jump in to the market when I did as prices keep rocketing (although getting in earlier would have been better financially). Which raises the rent vs buy question. Home ownership is in my blood but renting financially for some people could be better for them especially if they used the money in other ways e.g. shares or other investments. However for me its a place of security, its mine, I can’t be kicked out, I dont have to wait for a landlord to fix things, it works for my cats. Also I’ve also considered it my ‘not forever home’ which means its okay if things arent perfect, I don’t overcapitalise which helps me focus on paying down the mortgage faster.
Always be a good discussion topic this one rent v own. I’ve owned my own home for 18 years now and being able to renovate half way through meant we could upsize for more kids !! I suppose a good thing to keep in mind if you are thinking of having a family down the track. Certainly capital gain over 18 years makes us look at ownership as a great long term savings bonus as we could downsize for retirement , rent and extract a sizeable amount of cash. Will be different for everyone but good to hear others views.
Being single, I find renting a much easier option. Can rent a room close to town that is very affordable considering all the savings you make (Fuel, transport, parking, water included, etc). I used to own a house but it came with a huge amount of responsibility, mainly due to having mates board there so I could cover the loan. I’ll be renting for the forseeable future, possibly look at ownership again when I have a family.
There are some really interesting points of view here. I suppose it all comes down to a couple of things: the stage you are at in your life and your financial position. Security vs freedom. Much to ponder on!
That’s how I would surmise things at this point red_rav.
For me, my freedom is priceless. I learnt that the hard way though. Thankfully, I am no longer a home-owner.
Not wanting to talk you out of it mind! I believe home-ownership is a personal affair - we all have our reasons.
For ages I thought I’d be a renter for ages, but as I get older I’m thinking I will buy or build. I want the ability to make all my own decisions about what happens around the place. I’m getting a bit sick of having to ask to do stuff all the time!
Hey Allan! That’s really good to hear. I’ve been thinking about this approach with my partner for the last few years. Having the responsibility of having my own home is something ive always desired as I’m sure you do as well. Whether it be paying off the mortgage, being able to work on the car out the back or doing the gardening, there is something a little bit more special about that when you can call it your own. Hang in there on the renting for now; lock in good prices and save were you can as you’ll appreciate it in the end. Soon we can be our own bosses on the property ladder! All the best
Home owners. But realistically if we didn’t have two incomes, four years of earning Aussie dollars while every other western economy tanked, and a bit of parental help, I’m not sure if we would have gotten there by now. Home ownership is a money sink (Bunnings, man!) but I like it anyway.
I’ve been a home-owner for 25 years and wouldn’t like to rent long term. I love the security of my own place and it is a home to grow my family.
I had been a home-owner for 8 years and wouldn’t like to rent long term but I do like the flexibility of renting, so much easier to move around town.
Sadly I think that unless people who want to buy are willing to take drastic action becoming a home owner now will be really difficult. We lived in Australia for ten years and saved hard to buy property here before we moved home. Our family home in Chch (bought before the Feb Chch quake) was purchased for 225k - 3 bed, big section, ugly but liveable. It was damaged badly three days after we went unconditional and I thought we’d sunk our life savings into a dud. It was a dark time. But now houses on the same street with less land are selling for well over 350k. Our mortgage payment on around 180k loan is less than it would cost to rent a 2 bed flat in Chch now - so I think it worked out for us in the end and I don’t think renting for life is a sound strategy. That said, we rented when we lived in Sydney - because we knew our goal was to buy property elsewhere. Horses for courses, I guess.
Owning a home (and a mortage) should be thought of as an investment for retirement…part of a pool of different investments rather than the one key investment that a lot of NZers rely on.
Each to their own - renting’s not for everyone (it can be hard to find something longer term and also if you have pets), and owning a home (with it’s additional costs and lack of flexibility) isn’t for everyone. But at the end of the day, you’ll want a solid investment portfolio with which to enjoy (rather than just survive) retirement.
I have owned two homes over a period of 10 years or so when my son was living with me.
Now I rent a two bedroom flat in Chch for at lot less than most peoples mortgage repayments. Been living here for about 8 years. No desire to go back to home ownership. I consider myself luckly that I had earthquake insurance so all I had to do was move into a motel while the repairs were being done. No worries about losing my home or paying for R&M and I’ve got a great landlord. Sure it means I don’t have the same retirement nest egg, but there are other options. I think that is the purpose of home ownership to make sure you’ve got something to live on when you can’t work anymore. People say renting is dead money but for me my mortgage was double the price of the house plus all the repairs over its life time I had to fork out for. It also gives the bank an asset it can take if you fall on hard times. Robert Kiyosaki in Rich Dad Poor Dad says your home is a liability.