The decision to rent or buy a house in Auckland with a growing family involves evaluating finances, considering location and commute impacts, aligning with long-term plans, and seeking professional advice for informed decision-making.
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“I have a 9-month-old, and my wife is currently on maternity leave. Currently, we are living in a rental and paying $450 a week. We do have a deposit saved up to get into a townhouse in Auckland, but mortgage rates are quite high at the moment, and we are having second thoughts. My rental is quite nice and it’s 5 minutes away from work, but if I end up buying, I’ll be living a lot further away. If we do get a house, we will be paying around $5000 a month with current rates. My wife is going back in April next year, though. Should we keep renting or think about buying soon? What is a better option? I do want to give the best opportunity for my baby, but things are tight.”
(Original question on Reddit)
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The decision to rent or buy a house is a significant financial choice, and there are several factors to consider when making this decision. Here are some key points to think about:
Financial Considerations: To decide between renting and buying in Auckland, you must first evaluate your financial situation. With your wife on maternity leave and a 9-month-old child, it’s essential to have a clear understanding of your budget. Consider the current mortgage rates, your down payment, and potential monthly mortgage payments. Compare this with your current rental cost of $450 a week, and project your housing expenses to see if buying is financially feasible. Ensure that you’re stretching your finances appropriately and that you have room for unexpected costs that come with homeownership.
Location and Commute: Your rental’s convenient location, just 5 minutes away from work, is a significant advantage. Consider the implications of moving to a different location if you buy a house. A longer commute might not only increase your transportation costs but also affect your work-life balance and time spent with your family. Evaluate how this move could impact your daily routine and family dynamics.
Long-Term Plans and Flexibility: Your future plans are critical in this decision. Are you committed to staying in Auckland for an extended period, or do you foresee potential relocations? Renting offers flexibility, as you’re not tied to a property for the long term. Consider your career and personal aspirations and whether they align with homeownership. Assess whether your current life situation and future goals align with the stability and commitment that buying a house represents.
Professional Guidance and Market Analysis: It’s advisable to seek professional advice and perform a market analysis. Consult with a financial advisor or mortgage specialist who can help you understand the nuances of your specific financial situation and the local real estate market. They can provide insights on mortgage rates and market conditions, helping you make a more informed decision. Keep an eye on the real estate market to see if mortgage rates are expected to change in the near future, potentially affecting the affordability of homeownership.
In conclusion, the decision to rent or buy a house in Auckland with a growing family involves a thorough assessment of your finances, location preferences, long-term plans, and market conditions. By carefully weighing these factors and seeking professional guidance, you can make an informed choice that best suits your family’s current needs and future aspirations.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
