SearchLooking to future
Michael asks:
(updated on Tuesday, December 02nd 2014)
Hi Ron, we are looking to buy our first home in Auckland. We are currently on one salary and have a budget of $400,000. In a few years, when we are on two salaries, our budget will be $500,000 to $600,000. We are looking at our first property as an investment. We are deciding whether to buy a three-bedroom home on the outskirts of Auckland City for us to live in or alternatively buying a rental property and continuing to rent ourselves in a more central location. Either way we would only hold the property for thee years as our circumstances would have changed. Your thoughts on buying to live in or rent out would be appreciated. Michael
Our Experts Answer:
In Auckland we are still in a boom market and there is at least two more years to go. Your budget of $400,000 can still buy you a two-bedroom unit in central suburbs of Auckland. Property values will potentially increase another 25% to 35% on current values. This would effectively increase your equity and give you another deposit to buy a three-bedroom home at a later date.
In the current market it is actually cheaper to rent a home as many places are yielding less than the bank interest rates. However this may very likely change in the coming year as Canada, UK and Australia gradually close their doors to immigration. New Zealand is becoming a more popular choice of destination and will increase demands on both rental and housing accommodation.
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