Puzzle Finance Blog
Is it cheaper to rent or buy?
WHILE renting may seem the cheaper alternative to buying a home, new figures have revealed it can end up costing pretty much the same over the long term — and you’ve got nothing to sell at the end.
The figures collated by finder.com.au reveal that renting a house over 30 years will cost you almost $1 million, while buying a house at today’s current median house price will end up costing about $1.2 million.
Michelle Hutchison from Finder.com.au said the figures showed it was worth considering buying a home instead of wasting dead money renting.
“If you are renting that money has paid for someone else’s investment,’’ she said.
She said the total cost for a house based on the national median house price with a 30-year loan term was more than $1.2 million.
“Compared to renting, the national median weekly rent for a house is currently $424, which equates to about $998,830 over 30 years (adding current inflation of 2.7 per cent p.a.),’’ she said.
Ms Hutchison said it can be a tough decision to choose between renting and buying a home.
“The question to stay renting or to enter the property market is a constant struggle for many Australians because of property prices, saving for a deposit and uncertainty of interest rates,’’ she said.
“But if you compare the likely cost of rent for the next 30 years, it’s worth considering buying a home.’’
With the current low interest rate environment Ms Hutchison said it was more affordable to maintain a mortgage now than it was three years ago.
She said while buyers were concerned about affordability, it was still a good time to enter the market because interest rates were low.
According to figures from RP Data Darwin has the highest median asking rent in Australia for houses at $650 a week.
Where the renters are
Darwin — 43.2%
Canberra — 31.0%
Sydney — 32.4%
Perth — 28.2%
Brisbane — 33.7%
Melbourne — 28.0%
Adelaide — 28.8%
Greater Hobart — 28.2%
Source: RP Data
Posted by News Limited Network on 12th February, 2014 | Comments | Trackbacks
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