Renting Or Buying A House In New Zealand - Which Is Best?

In this video we take a deep dive into some real-life numbers and compare the pros and cons of renting versus buying an average house in New Zealand. If you can save enough for a deposit to purchase a house (or even if you don't) we compare 2 options in this scenario - either purchasing a property or renting and investing the deposit for investment gains. We'll show you what the final numbers come out as based on our personal last 20 years of data. The results may surprise you!
⏱️ Video Chapters ⏱️
00:00 Intro
00:50 Background On Our House
01:37 Making Some Assumptions For Purchasing vs Renting
02:35 Caveats For Our Comparisons
03:20 Renting A House - Pros
04:03 Renting A House - Cons
04:26 Buying A House - Pros
05:11 Buying A House - Cons
06:20 Getting The Numbers - Historical Rental Prices In My Suburb
06:53 Historical House Prices In My Suburb
07:19 Historical Rates/Property Tax For My House
07:43 Historical Insurance Costs For My House
08:08 Maintenance Costs/Guesstimates In My Suburb
08:47 Summary Of Baseline Numbers
09:00 Inflation Over Time In New Zealand - Some Comparisons
10:47 Project Rental Prices Over The Next 30 Years
12:03 Projected House Prices Over The Next 30 Years
12:57 Projected Rates/Property Tax Over The Next 30 Years
13:51 Projected Insurance Costs Over The Next 30 Years
14:16 Projected Maintenance Costs Over The Next 30 Years
14:30 Opportunity Cost When Renting And Investing The House Deposit
15:30 Renting Vs Buying For A Single Person
21:31 Renting Vs Buying For A Couple (Or With Flatmates)
23:50 Summary
Mortgage Calculator: www.opespartners.co.nz/mortga...
Fix Or Float Your Mortgage?: www.consumer.org.nz/articles/...
Historic New Zealand Interest Rates: teara.govt.nz/en/graph/23100/...
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Thanks for watching!

[@ProjectFrugal]

Our numbers are accurate for our circumstances but not be applicable for yours. This is all in NZ dollars. I don't want a second property as a rental but maybe it makes sense. What are your thoughts?

[@MeetTK]

Thank you for the video

[@ProjectFrugal]

Hope it helps and makes sense :)

[@MeetTK]

I live in Christchurch, i think we all know housing is the way to go so just trying to save for that deposit :)

[@ProjectFrugal]

@@MeetTK Good luck buddy. Sounds like you know what you want so I encourage you to keep grinding away and you'll definitely get there :)

[@chrisstott3508]

Very good analysis, thanks. My only concern is whether the future will resemble the past.
I imagine demographic collapse reducing the demand for accommodation, though maybe more slowly in NZ than elsewhere.
The resulting cessation of city expansion would also force massive rates rises.

[@ProjectFrugal]

Thanks - glad you enjoyed it. It will be interesting to see how it pans out. We're potentially looking at moving to Portugal which has a lot of empty properties (including ruins) and the population is not growing at all - The house prices are1/3rd to 1/2 of an equivalent property in NZ (generally speaking). NZ at the moment definitely has a growing population and I can see demand creeping back up pretty quickly. Our suburb has had a massive amount of subdividing with multiple 2/3 stories units being built so there is a large supply at the moment. We will see!

[@philipbudd3741]

That is a lot of work you have done, for me I like to fix/ do things myself on my own house, if I was starting again I would more than likely buy a camper (if I had no kids) and try and invest as much as I could, if that went well put that on a house then start paying off the rest of the house and try and invest small until I pay off my house, for me I would hate to rent when I retire, no thanks on a rental and dealing with people, give me those sweet passive dividends 🕺we are all different so just my thoughts.

[@ProjectFrugal]

I concur and that's what we did (apart from the camper). Started investing small 5 years ago until the mortgage was paid off and once that was done then the "mortgage" money now became the new investment money while maintaining the same frugal lifestyle :)

[@christinel.3221]

But there is almost no house now worth $615k in New Zealand 😢

[@ProjectFrugal]

According to TradeMe properties, there are 2,972 properties on the market currently for 3 bedroom, 1 bathroom houses under $600k at the moment ... (not including units, 2 bed 1 bath, or 4 beds or more) so there is plenty available at the moment.