Why ditching your car could be the key to getting on the property ladder

Why ditching your car could be the key to getting on the property ladder2 May 2018

The trend for apartments with no car parking has been catching on in New Zealand after having been a popular option in many overseas markets for years.
“Young people are becoming progressively less attached to their car,” Dr Taylor of RMIT said. “There’s a growing sub-market of people that are more than willing to make the trade-off to have a nicer apartment without a parking spot.”

Financial planner and Wealthful founder Chris Bates said many young people had to choose between car or home ownership, and suggested buyers struggling to get into the housing market could sell their cars to increase their deposit.

“The cost of having a nice car might be not buying your first home,” he said.

The surprising costs of owning a car
A $25,000 car owned outright will cost $5396 a year in running costs, fuel and depreciation, or $104 a week, according to a finder.com.au analysis. The same car with a five-year loan costs $11,270 a year or $217 a week, equating to more than $56,000 over five years.

This high spend can make a serious dent in anyone’s attempt to save for a deposit, Bates said. “You don’t want a car to stop you buying a home.”

Convert that $100 or $200 a week of car ownership into a mortgage repayment, and first home buyers are finding that they can get on the property ladder much quicker than they otherwise thought.

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