B25 - Buying or Renting in a Different Neighbourhood
Depending on where you live and the amount of money you can get from selling your home, you may be able to sell and move to another neighbourhood.
There are two ways you can work with this option:
- Buying: You could look to use the 'equity' from your house sale to buy a new home elsewhere. Equity is the money you are left with after any mortgage on your property has been
deducted from the sale price.
See B26 Selling and Buying a Cheaper Home
for information on how to estimate your home's market value and how to get information on house prices in different areas.
You will need to include the expenses involved in selling a house (such as legal, bank, advertising and real estate fees, moving costs and final utility bills)
when you are working out how much money your house sale will give you.
- Renting: You may decide to sell and rent elsewhere rather than buy a new home. Many councils and some community housing providers offer rentals specifically for older people.
However, most rental properties are in the private market.
Tenancy Services provides advice for renters and up-to-date market rental data. Websites such as trademe and realestate.co.nz advertise current rental properties around the country.
For more information about renting, see B22 Renting.
Pros and cons of buying
Pros
- If you have a relatively high amount of equity in your home, you will have a wider choice of places to buy.
- You may be able to invest any excess funds from your house sale and use them as supplementary income or as a safety net for unforeseen future expenses.
- Moving to a different neighbourhood could improve your access to amenities, services, friends and family.
Cons
- If you have little or no equity in your home, your choice of a different neighbourhood will be restricted.
- Moving to a different neighbourhood may reduce your contact with friends, neighbours and family who remain in your old neighbourhood.
Pros and cons of renting
Pros
- You could invest the money from your house sale and use it as supplementary income or as a safety net for unforeseen future expenses.
- Renting offers you flexibility to move and experience new neighbourhoods.
- Moving to a different neighbourhood could improve your access to amenities, services, friends and family.
- The landlord is responsible for all costs in upkeep/maintenance on the property.
Cons
- Research shows that private rentals in particular are often of poor quality. They can be cold, damp and under-maintained.
- Generally, renters can expect to live in a council, CHP and Kāinga Ora rental for a long time, but private rentals are often less stable.
- Rents can go up over time.
- There are upfront costs associated with renting. Most landlords require a bond and rent paid in advance. You may also need to purchase appliances and curtains not supplied by
your landlord.
- It can be difficult to get home modifications made to rental properties, for example, handrails, a wet-area shower or a ramp, as any modifications must be approved by the
landlord.
- Moving to a different neighbourhood may reduce your contact with friends, neighbours and family who remain in your old neighbourhood.
What do I need in order to take this option?
You need the funds and the right home to be available. Mortgage-free or small-mortgage homeowners whose homes have a high value have more flexibility to find a
home that fits their needs well. However, home-owners who have high mortgages or low-value homes will have fewer choices.
Could this option limit my future choices?
Home-owners who sell and buy another home will have choices in the future. The exact range of choices will depend on how much they get from the sale of their home and the house
price movement in the new location.
Home-owners who become renters may potentially limit their ability to buy again in future. However, this will depend on how much they get from the sale of their home and what they
do with the money from that original sale.
For more information on estimating the value of your home
For more information on buying a home
For more information on renting