Is it better to rent or to own a home?

Owning your own house is the quintessential Kiwi dream. We’re told there’s nothing we would all like more than to have our names on the mortgage that paid for the roof over our heads.

But considering the amount of money buyers have to shell out to get into the market at the moment, some might wonder: Is it worth it? We look at the pros and cons.

YES, BUY: When you own a house, you aren’t paying someone else’s mortgage. Is there anything more frustrating than seeing hundreds of dollars funnelled out of your bank account each week and into someone else’s pocket? If you can switch renting for a mortgage, every payment gets you closer to owning your own place, outright. BUT ...You’ll pay a lot more for the privilege, so you’ll have less to invest elsewhere. Barfoot & Thompson data shows the average sale price in Avondale, in Auckland, is $922,042 - or $1000 a week over 20 years on an 80 per cent mortgage. You could rent for an average $493 a week.

YES, BUY: Historically, house prices have doubled roughly every decade. If you buy now, whatever you pay it will probably look like a bargain in 10 or 15 years. BUT ...There’s no guarantee that house prices will keep going up at the rate they have in the past. Paying rent is frustrating but paying down a mortgage just to get out of negative equity (where you owe more than your house is worth) could be worse.

YES, BUY: You can do what you like to your own house. Want to paint the place bright orange? Go for it. Take out a wall? Feel free. When some landlords quibble about picture hooks in the walls, the freedom to do what you like with your own place is liberating. BUT ... If something goes wrong, it’s a relief to be able to call the landlord to have it fixed free. No worrying about whether you have enough money in the budget this month to pay a plumber to fix the toilet that’s all your landlord’s problem.

YES, BUY: When you own your own house, no-one is going to kick you out (provided you keep paying the mortgage). Especially for people who have kids, this security can be very important - you know you won’t have to take them out of school or uproot them from their friends. BUT ... If you want to move, it’s a lot more of a hassle. Renters can usually give notice and book the movers. If you own, you have to list the house, deal with open homes, get a suitable offer, arrange the right settlement date ... and then you can think about moving.

YES, BUY: Paying off your mortgage is the best thing you can do for your future retired self. Trying to cover rent on the pension is hard - the only way off the rent treadmill is to make your house freehold. It also gives you something to leave for your kids. You can spend all your KiwiSaver cash on your retirement living costs, knowing that you will still have the equity in your house to pass on. BUT ...If you’re a lifelong renter you don’t have to worry about pulling together hundreds of thousands of dollars for a deposit while you’re still young enough to have a hope of paying off the mortgage within your working life. You could travel, take more family holidays, and look out for other investment opportunities, maybe even your own business. You can probably also afford to live in a better area when you are renting than you could if you bought.

Is there anything more frustrating than seeing hundreds of dollars funnelled out of your bank account each week and into someone else's pocket?