Purchasing a home is one of the biggest financial decisions you can make. While the focus is often on the upfront costs, such as the down payment and mortgage, several hidden costs of homeownership can catch prospective buyers off guard.

Don’t let this be you. Before buying a home, you should be prepared for all the hidden costs you may not have considered. This will help you make an informed decision that you can feel confident about.

Whether you're a first-time homebuyer or looking to upgrade, this article aims to equip you with knowledge of these hidden costs, helping you budget effectively and ensuring a smooth transition into your new home.

What is the most common price for a house in NZ?

Before diving into the hidden costs, it's good to have a clear idea of the typical price range for houses in New Zealand. According to recent data, the median house price across the country is approximately $800,000. However, this can vary significantly depending on the location. In Auckland, for example, the median price is higher, at around $1 million, while in other regions, it may be lower. Knowing these average prices will prepare you for the additional costs associated with homeownership.

Let’s find out what they are.

Hidden home buying costs you need to know about

Council and water rates

Council and water rates are one of the biggest ongoing costs of homeownership in New Zealand. Council rates are charges levied by local councils to fund essential services such as rubbish collection, sewerage, and infrastructure maintenance. The amount you pay in council rates is determined by the value of your property, so it's crucial to consider this cost when budgeting for homeownership. We recommend you inquire about the council rates for the property you are interested in before purchasing.

Insurance

It goes without saying that building and contents insurance is an essential cost associated with homeownership. It protects your investment and belongings incase of damage or loss. Research different insurance providers and obtain quotes to ensure you receive the appropriate coverage at a competitive price.

Maintenance and repairs

Owning a home means maintaining and repairing any issues that may arise. These costs can increase over time, from regular maintenance tasks like painting and landscaping to unexpected repairs such as plumbing or electrical problems. It is advisable to build a contingency fund for these expenses.

Building inspection report

In New Zealand, there is no requirement to obtain a building report before making an offer on a house. Although it may be tempting to overlook this stage, we strongly recommend getting one. Gaining insight into the completed work on the property can help you understand its condition and what you are investing your hard-earned money in.

Abuilding report, carried out by a certified builder, can cost anywhere from $500.00 +. Still, it’s worth the investment as it aims to identify any underlying issues while giving you peace of mind there will be no unwanted costly surprises.

Legal fees

Buying a home can be a fast-moving process, so you’ll want to find a reputable lawyer in the beginning phase to ensure all the legal paperwork is in order. From examining the title record, which delineates the property boundaries along with associated rights and constraints, to overseeing auction documents and LIM reports, a range of legal work is involved. The cost for these services can vary dramatically. However, the cost typically falls between $1,200 and $3,000 based on the property type and the complexity of the legal procedures.

Utilities and furniture

While utility costs are not exclusive to homeownership, they can increase when transitioning from renting to owning a home. These costs include electricity, gas, water, internet, and any other necessary services. You may even want to consider new appliances and furniture that add that exciting personal touch you’ve been waiting for.

Remember that you may also need professional movers to help you transition your belongings into your new home.

Get homeownership guidance you can trust

If you're considering becoming a homeowner in New Zealand, I hope reading this article makes you feel more informed about navigating this exciting chapter. Yes, there is much to consider, but knowing the hidden costs of home ownership will keep you on track and avoid stressful surprises later on.

You can feel confident about the process by doing your research, consulting experts, and budgeting effectively.

If you have any questions or need professional advice, don't hesitate to get in touch with me for a free consultation. My commitment to creatively structuring mortgages to help you save money and maintain low costs has earned me recognition as one of NZA’s inaugural Top 25 Brokers.

I offer expert mortgage guidance with a focus on personalised service, delivering tailored solutions to help you achieve your financial goals.

You don’t have to go through this complex process alone. Contact Benchmark Mortgages today and take the first step towards homeownership.

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