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