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Should you rent before you look to buy?
The surge in demand for housing in New Zealand, coupled with increased immigration, is reshaping the rental and property market this year. A trend towards stabilising interest rates and lower mortgage rates suggest a potential growing interest in homeownership. We’re also experiencing higher competition than in previous years to secure properties, particularly in larger cities like Auckland and Wellington, so my advice to returning Kiwi would be to be proactive in your search and do your homework first.
While everyone’s circumstances are different, here are some insights to help you make an informed choice:
Renting before buying
Market familiarisation: Renting provides an opportunity to understand the housing market, neighbourhood dynamics, and property values – crucial information for a long-term commitment.
Flexibility: Uncertain about your long-term plans of location preference? Renting provides flexibility and buffer time to explore different areas and property types without the financial commitment.
Time to assess: Renting gives you time to assess your financial stability and adjust to any changes in income or expenses upon your return.
Property selection: It allows you to take your time in selecting the right property to buy. You can evaluate various options, attend open houses, and thoroughly research neighbourhoods before making a purchase decision.
Buying right away
Equity building: If you have financial stability and are confident about your choice of location, buying a property immediately can be advantageous. Homeownership will start to build equity straight away, most likely resulting in long-term financial gains.
Stability: Owning a home provides a sense of stability and a place to call your own, comforting when settling back into Kiwi life.
Buyer’s agent: It’s common for Kiwis to move in with family or friends as a short-term solution when they move back home. However, if you’re wanting to jump on the property ladder right away, consider using a buyer’s agent on your behalf – an ideal solution between having to rent before you buy or buying sight unseen before you come home. Get in touch with Goodwins, a family-owned real estate agency servicing Auckland for 30+ years, to talk about the option of a buyer’s agent here.
How much time should you give yourself to find a rental or buy a property?
If you are planning to rent a property, Goodwins recommend you start your search two to three months before your intended move-in date. This should provide a reasonable amount of time to explore available rental options, conduct viewings, and complete the application process.
Buying a property requires more time and planning than renting, so we recommend beginning the process three to six months before your desired move in date.
What are the pros and cons of buying or renting sight unseen?
Pros
Buying or renting a property sight unseen means you can secure housing without needing to travel to the location, which is especially useful for people moving from afar. It also allows you to secure housing faster – ideal for looking in a competitive rental or real estate market.
Technology allows for virtual property tours, 3D walk-throughs and high-quality photos to provide a more in-depth viewing than traditional listings.
Cons
While technology can offer a comprehensive viewing, it may not capture all aspects of the property such as noise levels, the property’s overall condition, and neighbourhood atmosphere. It also doesn’t allow you to experience the ‘feel’ of the property including the layout, flow, and how natural light enters the space. The risk being; what seemed appealing online may not meet your expectations in reality.
Signing a lease or purchase agreement without physically viewing the property may lead to legal complications if there are undisclosed issues or if the property doesn’t meet expectations. Having a contingency plan in case you are dissatisfied with the property upon arrival is wise to mitigate potential downsides.
For more information and advice on the right housing choice for you, contact Goodwins .
