Tenancy a cheaper bet

Would-be first-home buyers have missed the boat to move from renting to owning.

The latest BNZ rent-or-buy report, which shows prospective first-home buyers whether they should continue to rent and save for a deposit, or when the time is right to buy, indicates renting is now a better move financially.

This year, the affordability gap closed, but now it is becoming more expensive to buy than to rent.

In September, it took 27.3 per cent of a couple's take-home pay to service the mortgage and related household costs on a lower quartile priced house. This is down from 32.2 per cent at the same time last year.

To pay the median rent on the same type of house takes 22.5 per cent of household income, down from 23.9 per cent at the same time last year.

It costs 4.8 per cent more household income to afford a traditional 25-year table mortgage at the current interest rate on a two-year fixed contract than to rent - assuming buyers had saved the deposit to afford a mortgage.

To read the full NZ Herald article click here

Posted: 1 Nov 2009

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