Rent or buy? New OneRoof and Valocity data reveals which is cheaper in Tauranga

New data has revealed it is cheaper to rent a home than to buy in Tauranga. Photo / George Novak

Everyone deserves the right to have a roof over their head. But the reality is that not everyone can afford to own their own home. OneRoof and Valocity's latest data compared rent levels with mortgage payments in suburbs around the country to see if there are some places where it is cheaper to buy - but nowhere in Tauranga fits that criteria. Property reporter Zoe Hunter finds out which of the city's suburbs have the biggest and smallest gap between the cost of renting and buying.

It is still cheaper to rent a home in Tauranga than to buy despite low mortgage rates, new data shows.

OneRoof and Valocity's latest figures revealed while cities like Rotorua had suburbs in which servicing a mortgage was cheaper than paying rent, this was not the case in any Tauranga suburb.

The data compared the monthly mortgage repayment on a median sale price for more than 900 suburbs across the country in the first week of July.

It excluded areas with less than 20 rentals and 30 sales and assumed an interest rate of 5 per cent on a 30-year term with a 20 per cent deposit.

The rate cut was not taken into account and extra housing expenses including insurance and maintenance costs were not included.

OneRoof editor Owen Vaughan said there were no suburbs in Tauranga where it was cheaper to buy than rent.

"In Tauranga, the rise in property prices has made the cost of servicing a mortgage higher than renting."

OneRoof editor Owen Vaughan. Photo / Ted Baghurst

The biggest gap between the cost of buying and renting was in Mount Maunganui where the cost of servicing a mortgage was $1182 a month more than renting.

That was closely followed by Bethlehem where renting cost $1040 less than the monthly mortgage.

Vaughan said suburbs with the smallest gap between the cost of renting and buying were in more affordable suburbs such as Parkvale where it cost $126 per month more to buy than rent.

However, OneRoof and Valocity's latest monthly data showed first home buyers represented 27.1 per cent of new mortgage registrations.

Valocity director of valuation and innovation James Wilson said investors were adopting a wait-and-see approach to the market as their share of new mortgage registrations continued to drop rapidly.

Simon Anderson, chief executive of Realty Group. Photo / File

Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys, said comparing renting and buying was not as simple as calculating data.

"Everyone's property goals are different," he said.

"Every New Zealander deserves the right to own their own home but for some people, it won't be possible."

Anderson said significant capital gains made in the last four to five years made houses less affordable for some people but interest rates were better than two years ago.

Tremains Bay of Plenty general manager Anton Jones. Photo / File

Tremains Bay of Plenty general manager Anton Jones said it depended on the type of property and how much equity the buyer had, which determined how much they could borrow.

"House prices are going up as well as the number of rentals as landlords sell houses because of increasing costs, which means they are not getting a good return on their investment."

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