Pukekohe vs Hamilton

Question from Claire updated on 23rd November 2015:

I have recently moved to Pukekohe and we plan to stay here for at least the next three years, maybe permanently.

I have two rental properties in Hamilton and currently have about 20% equity in them.

Ideally, I would like to keep them and wait for house prices to rise in Hamilton - but it would also be nice to own a house to live in here.

I am unsure whether to sell a house in Hamilton and buy in Pukekohe (where we are currently renting at $620 p/w) or hold on to the houses in Hamilton, continue renting in Pukekohe, and save up to buy in Pukekohe in two years time.

The market here is pretty strong and I don't want to miss out on an opportunity to take advantage of that.

Our expert Kris Pedersen responded:

There are pros and cons with both options.

I believe if you hold the Hamilton properties that you should get some more capital growth as there is definitely increased interest in the Hamilton market since the banks have started to apply the 30% deposit requirement for the Auckland market.

On the flipside, because of this the Auckland market is definitely a bit quieter. This means it might be easier to pick up a property at a good price in Pukekohe.

You need to weigh up whether you believe the gains in the Pukekohe market will outweigh the potential gains in the Hamilton market enough to make it worthwhile. You should also take into consideration the sales costs of the Hamilton properties.

Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz

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