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Rent hikes 'will see more Aucklanders look to buy this summer'

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Fuseworks Media
Fuseworks Media

"With the average weekly rent across the Auckland region now in excess of $500 and some interest rates falling below 4.5%, many renters will contemplate becoming buyers and for some it will make much more sense," says Geoff Barnett, National Manager of Century 21 New Zealand.

His comments follow the release of Trade Me Property date today that shows the cost of renting a typical home in Auckland has surpassed $500 a week.

"Renters will start doing their sums and many will be surprised. With Auckland rents up, but interest rates down and house prices softening, many will discover that servicing a mortgage may be less than paying rent into their landlord’s pocket. On top of that, you’re assured of good long-term capital gain given Auckland’s strong forecast population growth.

"With not as many Auckland houses going under the hammer in such a frenzy, this summer could be the best time in many years renters have had to take stock and take the step to secure home ownership, particularly when you consider the low interest rates."

Mr Barnett says if a buyer has a 20% deposit and can secure say a two-year 4.49% interest rate to borrow $500,000 to buy a relatively modest property - that would cost $432 a week to service and could be cheaper than rent.

"We’re seeing more young couples and single people in particular coming into the Auckland housing market again which we haven’t seen for a while. Admittedly, some are having to leave there more central rentals to buy further out. However for many that makes a lot of financial sense as it gets them on the property ladder.

"Our agents at Century 21 are expecting a busy summer. Falling interest rates and ongoing rent hikes in Auckland will give the local real estate market a timely boost," says Geoff Barnett.

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