Linda Hall, Middle NZ: To rent or buy - that's the question

Owning your own home is becoming harder and harder for some people. Photo / File

COMMENT:

The story in Tuesday's paper about mortgage versus rent was interesting.

Over the years I've asked myself the same question over and over. Is it cheaper to rent or buy?

I grew up with the expectation that one day I would own my home.

It's what you worked for and I still remember the celebration when my parents paid off their mortgage.

The article I'm referring to said in some suburbs in Hawke's Bay it was actually cheaper to pay a mortgage off than it was to rent.

Longlands topped the list with a monthly difference of $355.67. The figures didn't take into account rates and insurance but the $355.67 saved on rent would cover that.

No so in many other areas such as Akina where the difference was only $1.33 a month. No way is that going to cover rates and insurance.

However, it's all very well saying that people are better off paying a mortgage than rent. We all know it's not that simple.

First step is saving a deposit. That's not easy these days when rent takes such a whack out of wages.

Prospective home buyers are stuck between a rock and a hard place. Striving to save enough for a deposit while struggling to put food on the table, pay rent and bills.

Not only that but finding a house to buy in Hawke's Bay is not that easy.

I've seen several for sale signs go up in the past few months and been amazed to see sold signs up within two weeks.

Linda Hall

It must be so frustrating and stressful for people that have actually managed to save enough deposit to put an offer on a house only to be outbid by someone else time and time again.

Off course the other thing to consider is the low interest rates at the moment. That doesn't help savers one little bit.

It's also so low that there's not very far for it to go before it has to go up.

Fixing your mortgage is all well and good but I'm pretty sure the maximum time you can fix it for is five years and who knows what the interest rate will be by then.
I've written on this before and shared the fact that the first mortgage I ever had was around 8 per cent when it was taken out but within two years had skyrocketed to 18 plus per cent.

It was not a good time but we survived and I now believe that the hardship of paying a mortgage is well worth the long-term gain.

There are ways to save if you are determined — perhaps you could think about sharing a house with another family and therefore halving costs while you both save hard for a couple of years.

Stay with family — if you knew there was light at the end of the tunnel — and a home you could call your own — it's amazing what you can put up with. Another option for the future could be more gated communities where people share the cost of the land upkeep, share facilities such as a gym and a pool.

Not such a bad idea these days. At least you would get to know your neighbours.

Perhaps owning our own piece of paradise will become a thing of the past as land prices itself out our reach. I certainly hope not.

That would be a sad day for Aotearoa.

Linda Hall is Hawke's Bay Today's premium content editor.