Tenants seeking an escape from Auckland's rising rental rates and looking to get on the property ladder spell good news for mortgage advisers, a Trade Me Property statement reveals.
Median asking rents in Auckland have rocketed up more than eight per cent on a year ago with Aucklanders forking out $499 per week for a typical property and taking annual rent costs close to $26,000, about $2,000 more than a year ago.
“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 Century 21 New Zealand
national manager Geoff Barnett
He says in light of the recent cash rate cuts and possibly again on 29 October, the cost to service a residential bank mortgage is falling.
“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.”
Mortgage Priority director Gavin Hyde
told NZ Adviser
renters are certainly asking themselves the question of whether they should move into the property market and are contacting brokers to work out what they can afford.
“There definitely is a push where people are evaluating their rental outgoings versus what their mortgage outgoings would be in the current environment which is very low interest rates,” Hyde says.
Whether rental rates will continue their incline, Hyde says it’s difficult to say.
“Because rental rates have been fairly flat for quite a while, the latest increase is possibly a market correction.”
He says higher rates could be sign of increased immigration into Auckland, putting pressure on rental properties and giving landlords the opportunity to raise rents as an influx of people vie for tenancy.