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Calculator doesn't show the benefits
ALEX FENSOME Last updated 05:00 21/12/2013
CRAIG SIMCOX/ Fairfax NZ
MORE OPTIONS: Renters Tiffany Foskett and Jamie Bell say the extra $20,000 added to the house price cap ‘‘allows us more flexibility’’. They are pictured outside their rental home in Ngaio.
ON OFFER: This Upper Hutt home has an asking price of $329,000.
FOR SALE: This Lower Hutt home has an asking price of $360,000.
It's a debate that has been around for as long as we have had a property market - is it financially smarter to buy or to rent?
The Dominion Post has done its sums on the Wellington property market and come up with the answer - well, sort of.
In strictly financial terms, there's little doubt that renting is the best option. But, of course, it's not as simple as that, which is why people have been arguing about it for so long.
To work out relative costs in the region, we selected four houses in Wellington city, Lower Hutt, Upper Hutt and Porirua that were listed for sale on Trade Me last week, around the average prices for their area.
We then ran these through the Westpac bank mortgage calculator, assuming a 20 per cent deposit, annual joint income of just under $100,000 - the kind of salary a young professional couple might make - and a 30-year mortgage term. We also found out the rates bill for each property.
To work out the rent, we looked at weekly market rent figures from the Ministry of Business, Innovation and Employment for the relevant type of house in each suburb and multiplied that by 52 weeks. We did not include costs such as maintenance - likely to be about $2000 a year - or insurance.
On paper at least, renting came out best, which was no surprise to Shamubeel Eaqub, principal economist at the New Zealand Institute of Economic Research, who is known for his opposition to property as an investment.
Read more
http://www.stuff.co.nz/business/mone...w-the-benefits
ALEX FENSOME Last updated 05:00 21/12/2013
CRAIG SIMCOX/ Fairfax NZ MORE OPTIONS: Renters Tiffany Foskett and Jamie Bell say the extra $20,000 added to the house price cap ‘‘allows us more flexibility’’. They are pictured outside their rental home in Ngaio.
ON OFFER: This Upper Hutt home has an asking price of $329,000.
FOR SALE: This Lower Hutt home has an asking price of $360,000.
It's a debate that has been around for as long as we have had a property market - is it financially smarter to buy or to rent?
The Dominion Post has done its sums on the Wellington property market and come up with the answer - well, sort of.
In strictly financial terms, there's little doubt that renting is the best option. But, of course, it's not as simple as that, which is why people have been arguing about it for so long.
To work out relative costs in the region, we selected four houses in Wellington city, Lower Hutt, Upper Hutt and Porirua that were listed for sale on Trade Me last week, around the average prices for their area.
We then ran these through the Westpac bank mortgage calculator, assuming a 20 per cent deposit, annual joint income of just under $100,000 - the kind of salary a young professional couple might make - and a 30-year mortgage term. We also found out the rates bill for each property.
To work out the rent, we looked at weekly market rent figures from the Ministry of Business, Innovation and Employment for the relevant type of house in each suburb and multiplied that by 52 weeks. We did not include costs such as maintenance - likely to be about $2000 a year - or insurance.
On paper at least, renting came out best, which was no surprise to Shamubeel Eaqub, principal economist at the New Zealand Institute of Economic Research, who is known for his opposition to property as an investment.
Read more
http://www.stuff.co.nz/business/mone...w-the-benefits
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