The buy vs rent debate has become more confusing in recent years as first timers are priced out of southern capital city markets and ‘rentvestors’ (renters who own investment properties) have grown in number.
But does it still ring true that ‘rent money is dead money’?
Some enterprising young economists have crunched the numbers across Australia’s capital cities over the past 30 years and concluded that … drum roll please … it is better to buy.
Brisbane Times reported that the economists tracked for each year between 1983 and 2005 whether it was financially better to purchase property and sell it after 10 years or to have continued renting and invest the same amount into a mix of shares and term deposits.
Buying was overwhelmingly the better option, but not always. Timing was critical and in a few years when property prices softened it was better to rent.
These clever number crunches also considered 144 possible future scenarios. For Sydney, 100 per cent of those scenarios suggest buying remains the best strategy. For Melbourne, buying wins in about 70 per cent of scenarios. In other capital cities, it is an even call.
We feel obliged to say, interpret these results with caution. Who knows which of those 144 scenarios will eventuate, or if something entirely different will happen.
And deciding to rent or buy is not just a financial decision. Lifestyle factors also play a huge part.
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Answered the rent vs buy question for yourself? View our current listings for sale or check our listings for rent.