Buying instead of renting

Buying is more expensive than renting

Let's get this out of the way first. If we look at buying vs renting as a purely financial decision based on the next day, in my opinion, buying is far more expensive. Let me prove this out with math:

Scenario: $1 Million townhouse in New Lynn, rent of $800 a week. If buying, 20% deposit.

Opportunity cost of your deposit (and repayments)

There’s another cost people often forget: the return you could have earned by investing that money instead. Whenever you put money into your home — your deposit, principal repayments, renovations — you’re giving up the chance to invest it somewhere else.

For simplicity, let’s assume the interest rate on your mortgage is the same as the return you’d earn on savings or conservative investments. That’s almost never true (savings rates are usually lower), but even with this generous assumption, buying still comes out more expensive in the short term. You’re locking capital into a property that could be invested elsewhere.

Cost	Buying	Renting
Rent	$0	$41,600
Interest / Interest forgone	$55,900	$0
Rates	$2,800	$0
Insurance	$1,300	$0
Maintenance Fund	$2000	$0
Total	$62,000	$41,600

How much do you hate your landlord?

Capital gain

Property values change over time — sometimes up, sometimes down. In Auckland, values have historically increased for many reasons: population growth, limited land, infrastructure investment. But history isn’t a guarantee.

In our New Lynn example, the property would need to increase in value by roughly 2% per year, indefinitely, just to break even under simplified assumptions. And that assumes:

• stable interest rates,

• no major repairs,

• rents staying where they are,

• and the property always being easy to sell.

That’s a lot of assumptions.

There’s a persistent Auckland myth that “property always goes up.” Ask anyone who bought in 2021 and saw their valuation in 2023–2025 — the market can absolutely go backwards.

Past performance does not predict future returns. Treat capital gain as a possibility, not a certainty.

It’s not just about the financials

With all this said, the emotional and lifestyle benefits of owning your home are real, and for many buyers, they matter more than spreadsheets:

• The sense of belonging and permanence.

• Buying furniture that fits perfectly, knowing you won’t need to move.

• Renovating the kitchen or ripping up the carpet because you want to.

• No more anxiety about being given 60 days’ notice.

• Predictable housing costs instead of yearly rent spikes.

• Stability — for you, your family, your routines, and your mental wellbeing.

If your main reason for buying is “I don’t want to rent anymore,” then don’t lean on the financial comparison to justify it. The non-financial benefits often outweigh the short-term costs — but that’s a personal decision, not a spreadsheet result.