Should young home buyers be looking to the regions?
For many of us, living in Auckland can be challenging. Sure, there's plenty to enjoy about our largest city, but that comes at a price - namely, the comparably high cost of living.
It's little surprise, then, that a number of Auckland dwellers might look outside the big city for their housing investments. Our chief Squirrel John Bolton discusses the prospect of buying property in New Zealand's regions in another of our video blogs, looking at two different scenarios.
Living in Auckland, buying in the regions
From a certain point of view, this strategy can make a lot of sense. You need to stay in Auckland, perhaps due to career or family commitments, but you're not quite at the point where you can afford to enter the property market. Rather than holding off until you have the requisite funds for a deposit, looking into regional property investment can appear a smart way to get yourself into the market.
The numbers can be enticing - Real Estate Institute of New Zealand's (REINZ) December 2016 statistics show that in some of the regions, even those adjacent to Auckland, feature median house prices less than half of that in the city. According to JB, however, people who are committed to staying in Auckland would be better served waiting until they can buy into their home market.
Each market has its own unique characteristics, but the risks are the same no matter where you buy. Investing in the regions with the hope that prices in that market will go up, allowing you to turn a profit and buy in Auckland later can do more harm than good to your buying plans in the long run.
If you are set on staying in Auckland, your best option is to work on a saving strategy that allows you to buy there. It's never easy, but with house prices appearing to stabilise you may be closer to your deposit than you realise.
Moving out of Auckland
For those that have no critical attachment to Auckland and can live somewhere else without any real disruption, however, moving out of the expensive city can be a terrific option. The lowered living costs alone can add up to a much better lifestyle, and that's without even considering the buying of property.
You don't even have to go far - REINZ notes that in Northland, for example, the median is $410,000 - less than half the average in Auckland but geographically close enough that commuting to the city on occasion isn't difficult. Even further afield locations are suitable for many modern workers, with new technology allowing plenty of New Zealanders to have more flexible employment options, such as remote working over the internet.
Opportunities for earning a good salary outside of the city are available for many of us, and if your career is the only thing tying you to Auckland then it's worth investigating alternative options. The cost of living and lower housing prices can help set you on much improved financial ground.
Looking for further mortgage advice?
Whether you are looking to relocate to regional New Zealand or sticking it out with your plans for Auckland, Squirrel Mortgages can help you achieve your property-buying goals faster. Our team of experienced consultants can help with your mortgage strategy - from choosing the best provider to paying it off faster. Get in touch with us today, and find your perfect property, no matter where it is.