Hi there- I'm a noob to this having come back from 5 years living and working in Australia. We have a deposit of $300k and have pre-approval to buy for $1.2m in Auckland. Lately the news coverage has been of a stagnant and even falling house market in central Auckland so we are now hesitant to buy. Currently renting at $450 a week between the two of us close to work and the city.
If we see no capital gains or a declining market which is what the REINZ data is pointing to with high amount of stock on the market, increased days to sell, drop in median prices, election and possible change of govt etc is it better to rent for the next 2 years and invest the additional savings into shares etc
I ran some numbers through the Westpac investment calculator
- Borrowing $820k at 5.49% results in $45k interest p/a
- This nets out to $865 p/w
- Our current rent is $450 p/w so the opportunity cost of buying a house is almost $22k a year (excl rates, insurance, maintenance etc)
- If capital gains are flat maybe it makes sense to rent and invest that additional $22k into shares, term deposit etc
We own a house in Petone which is cash neutral at the moment and we could potentially use the additional $22k to pay down that debt too or save it to buy another IP in a couple of years time. Just want to check with the experienced investors out there whether my maths is correct and what they would do in this situation?
Cheers Matt
If we see no capital gains or a declining market which is what the REINZ data is pointing to with high amount of stock on the market, increased days to sell, drop in median prices, election and possible change of govt etc is it better to rent for the next 2 years and invest the additional savings into shares etc
I ran some numbers through the Westpac investment calculator
- Borrowing $820k at 5.49% results in $45k interest p/a
- This nets out to $865 p/w
- Our current rent is $450 p/w so the opportunity cost of buying a house is almost $22k a year (excl rates, insurance, maintenance etc)
- If capital gains are flat maybe it makes sense to rent and invest that additional $22k into shares, term deposit etc
We own a house in Petone which is cash neutral at the moment and we could potentially use the additional $22k to pay down that debt too or save it to buy another IP in a couple of years time. Just want to check with the experienced investors out there whether my maths is correct and what they would do in this situation?
Cheers Matt
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