4 ms·

In my city (Christchurch, New Zealand), renting is more expensive than mortgage repayments for an equivalent house. I don't see how renting could be a good idea

In my city (Christchurch, New Zealand), renting is more expensive than mortgage repayments for an equivalent house. I don't see how renting could be a good idea in this case. That said, I recognize that different cities have different conditions, and what makes sense in one city might not make sense in another.

Game_Ender 13y ago
Rent is an all-inclusive expense usually, while a mortgage is not. Rent covers maintenance, taxes, cost of future renovations, and you usually don't have high transactions in getting or leaving an apartment. So you can't directly compare mortgages and rent amounts.
- chad_oliver 13y ago
  Fair enough; that's a good point.
- pmorici 13y ago
  A good rent vs. own comparison like the one on the NYT website will take expected maintenance costs into account http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=0 http://www.nytimes.com/interactive/business/buy-rent-calcula...
datasage 13y ago
Its very important to take the total cost of ownership into account and not just the cost of a mortgage. While you can theoretically sell your house later. Money put in into maintenance, taxes, association fees, may not ever pay off.
patrickdavey 13y ago
Hah! I live in Christchurch too, and yes, rents have gone up, and yes, like everyone I've been thinking about buying. However! I'm also from Ireland where a _lot_ of my friends bought houses in the celtic tiger era and are now, on average, about 100K euro down on their "investments" My gut feeling is that Christchurch too is a bubble. Sure it's a bubble fuelled by a nasty earthquake reducing the supply... BUT supply will come back up again (and it'll be new housing with things like insulation!) Tricky things really. Currently my rent is cheaper than a mortgage for an equivalent - but only just. That said, I don' t have to pay rates, fees, hiked insurance etc. The other option of course is to leave for a while - easy enough to do as a decent developer.
toomuchtodo 13y ago
What's the difficulty level of getting a mortgage in NZ?
- chad_oliver 13y ago
  I've actually never got one myself, because I'm still at university. However, banks seem to be willing to lend up to 80% of the value of a house, for someone with an average income. I suspect the biggest problem is simply that houses are very expensive compared to most of the USA. I'm flatting in a really crummy house (as in, cracks in the wall) on a quarter-acre section, yet the property is valued at $500,000.

Game_Ender 13y ago

Rent is an all-inclusive expense usually, while a mortgage is not. Rent covers maintenance, taxes, cost of future renovations, and you usually don't have high transactions in getting or leaving an apartment. So you can't directly compare mortgages and rent amounts.

chad_oliver 13y ago
Fair enough; that's a good point.
pmorici 13y ago
A good rent vs. own comparison like the one on the NYT website will take expected maintenance costs into account http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=0 http://www.nytimes.com/interactive/business/buy-rent-calcula...

datasage 13y ago

Its very important to take the total cost of ownership into account and not just the cost of a mortgage. While you can theoretically sell your house later. Money put in into maintenance, taxes, association fees, may not ever pay off.

patrickdavey 13y ago

Hah! I live in Christchurch too, and yes, rents have gone up, and yes, like everyone I've been thinking about buying. However! I'm also from Ireland where a _lot_ of my friends bought houses in the celtic tiger era and are now, on average, about 100K euro down on their "investments" My gut feeling is that Christchurch too is a bubble. Sure it's a bubble fuelled by a nasty earthquake reducing the supply... BUT supply will come back up again (and it'll be new housing with things like insulation!) Tricky things really. Currently my rent is cheaper than a mortgage for an equivalent - but only just. That said, I don' t have to pay rates, fees, hiked insurance etc. The other option of course is to leave for a while - easy enough to do as a decent developer.

toomuchtodo 13y ago

What's the difficulty level of getting a mortgage in NZ?

chad_oliver 13y ago
I've actually never got one myself, because I'm still at university. However, banks seem to be willing to lend up to 80% of the value of a house, for someone with an average income. I suspect the biggest problem is simply that houses are very expensive compared to most of the USA. I'm flatting in a really crummy house (as in, cracks in the wall) on a quarter-acre section, yet the property is valued at $500,000.