It’s a dilemma that may seem hard to resolve. To help you make your decision, we weigh up some of the pros and cons of renting a home, buying or doing both.
While buying a home has long been widely considered a hallmark of the ‘Australian Dream’, or at the very least a solid investment decision, recent fluctuations in the housing market and lending and borrowing sectors have brought a fresh perspective to the rent versus buy debate. According to a quarterly rental report conducted by Domain, over the three months ending in June 2019, average rental prices dropped across most capital cities for both houses and units. Median property prices are also down in many areas, but Domain report s that price falls appear to be slowing in Sydney and Melbourne-the Sydney housing market, for example, is back to early-2016 levels after experiencing the largest downturn since the 1980s.
Likewise, CoreLogic’s monthly index for July shows that capital city housing prices are stabilising on the whole, although it does note that they are unlikely to recover any time soon. According to Domain, this flat-lining is partly due to the Reserve Bank cutting the official cash rate twice this year. This has arguably contributed to an environment of record low interest rates on home loans and an increase in new loans being offered to households.
With this volatility in mind, it may be hard to choose which path to take on your residential journey. To help you figure out what the best option is for you and your circumstances, here are some of the potential advantages and disadvantages of renting, buying and rentvesting (where you buy an investment property and continue to rent elsewhere).
Buying a Home
There are several potential advantages to buying your own home, such as security, the ability to make the space your own, and the possibility that it could help build your wealth.
On the other hand, there can also be some potential downsides to choosing to purchase a property rather than renting. For example: