If you’re getting ready to start your new life in New Zealand, finding somewhere to live is going to feature fairly high on your to-do list. But should you rent out your UK home and rent in NZ? Or should you sell and have a deposit ready to get straight on the housing ladder? There’s no right or wrong answer, but this article will help you make the best decision for your circumstances.
What are mortgage interest rates like in New Zealand?
While your interest rate will depend on the size of your deposit and your LTV ratio, the average mortgage rate in New Zealand is currently hovering at around 6.9%. This is only a fraction higher than current rates in the UK but is still a stark increase if you’re coming out of a pre-2022 fixed rate.
The high interest means now isn’t a particularly good time to lock in a rate, although ultimately, whether you bite the bullet now or wait a year or two is at your discretion. That being said, on top of high interest, you may also be having to stretch your budget to get on New Zealand’s housing ladder.
What is the average home price in New Zealand?
In a previous article, we explored what you can get for the average UK house price of £285,000 in New Zealand. We shared that there are huge differences in what your money gets you, depending on where in New Zealand you live.
As of August 2023, the national average house price was $888,999 – approximately £421,879. Unbelievably, this is actually down 16% compared to 18 months ago, when the average price was $1,053,483 – £500,000. House prices aren’t expected to continue dropping, although sales brought on by the hike in rates may mean supply outweighs demand in the coming months.
How expensive is rent in New Zealand?
In contrast to the UK, while expensive, the cost of rent in NZ isn’t significantly higher than what you’d pay on a mortgage. Between the housing boom that has inflated prices and rising interest rates, those on new mortgages aren’t saving much, if anything, compared to rental prices for homes of a similar standard.
Median weekly rent currently sits at around $600 per week nationwide, although you’ll pay more in cities than in smaller towns. However, it’s not the cost of rent that is a struggle for Kiwis and immigrants alike; it’s availability.
How difficult is it to find a rental in New Zealand?
Many areas of New Zealand are facing chronic housing shortages, partly due to restrictions preventing rural land from being bought and subdivided for housing. Topography can also impact the ability to expand existing townships, with many built between hills and rivers and surrounded by privately owned farms.
In areas like the Bay of Plenty, the influx of people is outstripping housing availability, meaning many properties have dozens of applications within hours of being listed. With that in mind, it’s worth making friends with your local rental agent and trying not to be too picky with what you’re looking for.
To rent or to buy, this is the question
All things being equal, it’s a good idea to rent initially upon arriving in New Zealand, especially if you’re not familiar with the different areas of the town you’ll be living in. Not only will you be able to get a feel for the area, but you’ll also not be spending much more than you would on mortgage payments, making it a great short-term option.
But don’t wait until you land in New Zealand and expect to line up a range of rental viewings – start looking early and get a headstart on your search.
Sarah Todhunter is a writer, mother-of-two and a dual citizen of New Zealand and the UK. As the sole proprietor of Fyxen Copywriters, she has navigated the ups and downs of moving a business and family across hemispheres, sharing the lessons she’s learned along the way.
