FIRST WORD FROM TOMMY’S REAL ESTATE
Photography: Bonny Beattie
Most will agree that in past years, a majority of Kiwis had a strong desire to own their own home. It has been suggested that homeownership
is in our DNA; a house and a quarter acre section was once the target for most aspiring homeowners. Then, perhaps a decade or two ago,
there was a growing trend towards rental accommodation becoming a popular option thereby leaving capital free for recreational uses,
travel and the purchase of items of personal enjoyment. There was even a body of opinion that suggested renting, based on financial and
economic grounds, was a sound option; that capital was best used for funding a business or to pursue some other revenue earning avenue.
Having looked briefly at the past, is there any
consistent pattern that is noticeable in today’s
market? The answer is clouded; there are
varying opinions among people in the market
today looking to house themselves and their
dependents. It is no secret that in and around
Wellington demand for rental property exceeds
supply and this has been the catalyst for soaring
rental rates and in fact, establishing an all-time
rental high for the capital city and suburbs. There
was a well-publicised case recently of a young
family who abandoned the renting option and
moved to a provincial centre where they were
able to purchase a home with lower outgoings
than they had previously paid in rent money.
Surely a move that makes a lot of sense!
Of course before moving out of the city there
are other considerations to ponder such as
employment commitments and opportunities,
and recreational and educational opportunities
that may be a factor in the lives of the
breadwinner and their family. Tommy’s obviously
has a vested interest in people buying and
selling property, but we also run a successful
rental and property management division. At
the risk of being accused of having a biased
opinion, we offer the following suggestions all
of which we believe are compelling reasons to
consider homeownership:
•
Interest rates continue to sit at an all-time
low making borrowing more affordable
than in the past. There is nothing to
not an option favoured by everyone but it is
a viable solution to a cash crisis or to fund a
travel experience.
indicate that this situation will change
dramatically in the foreseeable future.
•
•
Whilst high rents are attracting some
investors into the market, an equal number
are selling their investment properties
tired of ongoing legislative demands. This
pattern, if it continues is likely to send
rental rates to further peak levels.
Tommy’s has assisted thousands of clients
to achieve significant capital gains in
recent years. As long as home buying is
viewed as being a medium to long term
strategy, we feel confident that future
capital gains are likely to accrue to
homeowners.
• Owning your own home gives security of
tenure. You decide if and when you want
to move and you are not in the hands of
a landlord whose circumstances may
change at short notice.
• Homeowners have the scope to make
alterations, modernise or replace an
outdated kitchen or bathroom and to
generally make the house a home.
•
Retirement security. Having a roof over
your head that is yours is comforting
in retirement. This is a time of life when
income is usually limited but it is also a
time when you will reap the rewards of
previous years of planning and sacrificing.
The situation of being “asset rich but cash
poor” can be overcome by taking a reverse
mortgage in those twilight years. This is
•
No one wants a mortgage but for most of
us, a mortgage is a means to an end. Look
at your mortgage as being a compulsory
savings scheme. After all, isn’t it better to
be reducing your own mortgage than your
landlord’s mortgage?
We have said it before and we say it again: we
doubt that there is a better place to invest in
residential real estate than in Wellington City and
suburbs. We may not have the highs and lows of
other centres but we do have a consistent market
that has new buyers moving to and through
Wellington for employment and educational
opportunities. Our prices are relatively stable
and demand strong. We also have a team of
qualified agents at our various Tommy’s offices
who await the opportunity to share their
expertise and local knowledge with you. Buying,
selling or renting, we invite you to give us a call.
Best wishes,
Tommys Real Estate Ltd.