New CoreLogic data shows one in five areas now favour homeownership over renting
In around 20% of New Zealand, it is now cheaper to pay a mortgage than to rent, according to the latest insights from CoreLogic.
This surprising shift, driven by falling house prices and softening interest rates, offers new opportunities for first-home buyers—particularly in lower-priced regions.
In fact, mortgage affordability has reached its most favourable level in more than three years, with the national median mortgage payment now accounting for 38% of gross household income—down from over 50% at the peak in 2022.
Regional affordability creates rare homeownership advantage
New CoreLogic figures showed that mortgage repayments are cheaper than rent in areas where housing is most affordable, RNZ reported.
In Kawerau District, for example, median rent is $550 per week, while the typical mortgage payment is just $405—a difference of $145 in favour of ownership.
In South Taranaki, it’s $91 cheaper to own than rent, while in Gore and Stratford, the savings are $67 and $54 per week, respectively.
At the other end of the spectrum, some markets remain significantly more expensive to own.
In Queenstown, the cost of servicing a mortgage is $930 more per week than paying rent. The Mackenzie District follows at $440, and Auckland at $417.
In areas such as Whanganui, Masterton, Dunedin and Waitaki, there is little difference between mortgage repayments and rental costs.
Assumptions behind the numbers
The CoreLogic data is based on a standardised assumption of a 20% deposit, a 5% mortgage interest rate, and a 30-year loan term.
Kelvin Davidson (pictured left), CoreLogic’s chief property economist, noted the calculation provides a useful median-based comparison, but actual outcomes will vary.
Some first-home buyers may pay above or below the median property value, which would affect affordability calculations. The same applies to rent, which may also vary from the median, Davidson said.
Someone purchasing a lower-priced property after renting at the median rate might find that owning is comparatively more affordable.
Ownership has its costs—but also value
Despite the weekly savings in some regions, Davidson cautioned that buyers must consider the full cost of homeownership, noting they would also need to account for insurance, rates, ongoing maintenance, and the ability to save for a deposit, RNZ reported.
He added that recent shifts in the housing and interest rate landscape have created conditions where homeownership is becoming more accessible in some areas.
“I think generally it’s unlikely to have been the case over the past three or four or five years that mortgages have been cheaper than rent in too many areas, particularly because, for a start, house prices were high and then, secondly, they started to come down but interest rates were still high,” Davidson said.
Interest rate trends favour home buyers
Davidson noted that while rents have flattened over the past 18 months, house prices remain 16–17% below peak, tipping the balance for buyers, RNZ reported.
“In some areas at least at face value there’s value there in paying a mortgage rather than paying rent,” the CoreLogic economist said. “But of course there are other costs to take into account with homeownership.”
Gareth Kiernan (pictured right), Infometrics chief forecaster, agreed that recent interest rate drops are helping shift the affordability equation.
“The recent fall in home loan interest rates would have tipped the scales in favour of owning,” Kiernan said. “That was likely to continue in the near term because of concerns about the global economy.”
However, he also noted that rental yields remain low, particularly in high-priced markets like Auckland.
“In Auckland, for example, it might be hard to find a rental property where rent covered the mortgage,” Kiernan said.
Better quality for buyers, but challenges remain
Kiernan added that those who are buying may often be securing better-quality homes than those they rented.
Meanwhile, Davidson pointed to increased property and lending activity in the past 12 to 18 months, driven by looser loan-to-value rules and lower mortgage rates.
“The market was showing signs of a slow recovery in activity and prices,” he said.
However, Davidson warned that uncertainty from recent US tariffs and global trade tensions could influence local housing sentiment.
“I wonder if the scenario of a mild upturn in the housing market just becomes even that little bit more likely because potentially mortgage rates go a little bit lower,” he said.
“We’re an exporting nation; trade barriers can’t really be good for New Zealand as a country. So potentially the official cash rate goes a bit lower, mortgage rates go a little bit lower… if people were feeling a little bit uncertain about the share market or global markets, possibly they look at housing.”
Still, high listing numbers, debt-to-income restrictions, and a soft labour market could act as barriers to a full-scale recovery.
“A soft labour market is not an environment we would expect house prices to be soaring away. And also, the debt-to-income ratio restrictions are here too, this time… we are starting to hear anecdotally that a few more individuals are starting to find that a bit more challenging.”
“As those [test rates] were lower, debt-to-income rules would become more of a challenge.”
While the mortgage-versus-rent equation has shifted in favour of ownership in some areas, experts cautioned that buyers still need to weigh personal financial readiness, job security, and long-term costs, RNZ reported.
