Photo: RNZ
In roughly 20 percent of the country, it's cheaper to service a mortgage than it is to pay rent.
Data from Corelogic shows how median weekly rent compares to the mortgage payment for a median house in regions around the country, assuming a buyer has a 20 percent deposit.
The difference was greatest in the areas where housing was cheaper.
Kawerau District, for example, had a typical rent that was $145 more per week than a median mortgage, at $550 a week rent compared to $405 for a mortgage.
In South Taranaki, it was $91 a week cheaper to own than rent. In Gore, it was $67, and Stratford, $54.
At the other end of the table, Queenstown was $930 a week more expensive to own than rent, Mackenzie District was $440 and Auckland $417.
In Whanganui, Masterton, Dunedin and Waitaki, it was roughly the same.
The calculation assumes a 5 percent interest rate and a 30-year mortgage term.
Corelogic chief property economist Kelvin Davidson said some first-home buyers would pay more or less than the median value for their properties, which would alter the calculations. They might also be paying more or less than the median rent, too.
Someone who was buying a cheaper property but had been renting a median-rent home might find ownership was comparatively cheaper.
But he said buyers would also have to factor in things like the insurance and rates, and ongoing maintenance. They would also need to be able to save a deposit.
Davidson said the areas where it was cheaper to pay a mortgage had probably emerged as house prices and interest rates declined.
"I think generally it's unlikely to have been the case over the past three or four or five years that mortgages have been cheaper than rent in too many areas, particularly because, for a start, house prices were high and then, secondly, they started to come down but interest rates were still high."
He said rents had flattened in the past 18 months but had risen before that.
Houser prices were still about 16 percent to 17 percent lower than their peak.
"In some areas at least at face value there's value there in paying a mortgage rather than paying rent. But of course there are other costs to take into account with homeownership."
Infometrics chief forecaster Gareth Kiernan said the recent fall in home loan interest rates would have tipped the scales in favour of owning. That was likely to continue in the near term because of concerns about the global economy.
He said overall rental yields - the amount of rent collected compared to the purchase price - were not high and that indicated that renting remained cheaper than owning in many places.
In Auckland, for example, it might be hard to find a rental property where rent covered the mortgage.
Kiernan said people buying a median-priced home would generally have a nicer quality of house than people who were renting a median-priced home.
Both property sales activity and home loan lending activity had risen in the past 12 to 18 months, Davidson said. That fit with looser loan-to-value rules and lower interest rates.
The market was showing signs of a slow recovery in activity and prices.
The recent turmoil due to tariffs being imposed in the US could prompt some more interest at the margins, he said.
"I wonder if the scenario of a mild upturn in the housing market just becomes even that little bit more likely because potentially mortgage rates go a little bit lower.
"We're an exporting nation, trade barriers can't really be good for New Zealand as a country. So potentially the official cash rate goes a bit lower, mortgage rates go a little bit lower… if people were feeling a little bit uncertain about the share market or global markets, possibly they look at housing."
But there were still a number of restraints, such as a large number of listings and a weak labour market.
"A soft labour market is not an environment we would expect house prices to be soaring away. And also the debt-to-income ratio restrictions are here too, this time… we are starting to hear anecdotally that a few more individuals are starting to find that a bit more challenging."
A number of banks lowered their test rates last week, which they use to check whether borrowers can afford a loan.
But Davidson said, as those were lower, debt-to-income rules would become more of a challenge.
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