More Rotorua residents are giving up renting to become homeowners as buying your own home seems to be more affordable in the city.
According to the latest Roost Rent or Buy report on interest.co.nz, it seems cheaper to pay for a mortgage than to pay rent.
The figures, which assumed a 20 per cent deposit had been raised, showed that in February it took 17.9 per cent of a median weekly after-tax income for a Rotorua first-home household of $1345 to service the mortgage and related household costs on a house valued at $176,500.
This compared with 19.7 per cent of a household take-home pay to meet the median rent on a three-bedroom house.
In February, a floating mortgage rate of 5.73 per cent and a lower-quartile house price of $176,500 would require a weekly mortgage payment of $204.43, while the median rent for a three- bedroom house in Rotorua was $265 per week for the same period.
"That means in February 2012, it takes 1.8 per cent less of your household income to afford the mortgage than to rent. Of course, this assumes you have saved the deposit to afford a mortgage, and that may well be another big barrier for many," the report says.
McDowell Professionals sales manager Phil Hereford said now was a good time to buy as mortgage rates were low and banks were lending more money to people who qualified.
"There are more first-home buyers in the market place today than there was, say, a year ago ... but not in huge numbers," Mr Hereford said.
"The first-home buyers that we've got there at the moment, they're noticing that our mortgage rates are low," he said.
"The banks are now lending back up around 90 to 95 per cent providing they qualify."
"It's an amazing time for anybody to buy, stepping into the marketplace."
He said rents in Auckland had increased up to an extra $150, but in Rotorua it was nowhere near that. In Rotorua the rents had risen an average of $20 to $30.
He said first home buyers were realising the differences between buying a home and renting was not a lot, and with a large amount of homes for sale in Rotorua, buyers were getting good value for money.
"There is still in excess of 1000 properties on the market."
A seller needs to seriously consider a buyer's offer, he says.
"It's good value for money at the moment".
Rotorua's Jessica Hathaway bought her home about two years ago and said she would never go back to renting.
She and her partner live in Lynmore and spend about $300 a week on their mortgage.
She says she knows people renting homes in the area and paying between $280 and $330 a week, so buying and paying a mortgage seemed a good option.
"We bought the house we were renting off my parents. They were wanting to sell and thought we would be better spending our money on something for us and our future, rather then renting another and paying off someone else's mortgage," she said.
Paying for her own mortgage had also made her more responsible as she had become wiser about how she spent her money.
WHY RENT:
WHY BUY: