New data says buying 'makes more sense' than renting

A new report has suggested owning a property makes more financial sense than renting in the long term.

While property prices, saving for a deposit and the uncertainty of interest rates are obstacles for Australians hoping to buy into the market, an analysis of RP Data done by comparison site Finder.com.au suggests people who buy a median priced house will be better off than those who spend their life renting.

“If you can afford to buy, it is probably worth doing so,” Finder.com.au spokesperson Michelle Hutchison said.

“Renting in the next 30 years is going to cost almost a million dollars, whereas for buying at seven per cent that can cost 1.2 million,” Hutchison said.

Hutchison argues that although buying a house costs an extra $200,000 over 30 years, buyers end up with a property of their own, unlike renters.

“It is worth doing because you at least get the asset at the end,” she said.

“I chose to buy because I thought it was about time I started paying my own mortgage, rather than someone else’s,” homeowner Sonia Yang said.

Author of Debunking Economics, Economist Steve Keens, says he is a renter because he believes our market is due to crash – just like the US property market.

“We have now got the fourth most expensive housing in the world, and the ones that used to be more expensive than us [were] America, Ireland [and] Spain… they have all popped,” Keens said.

“It is not healthy for an economy in the long term to base itself on a house price bubble,” he said.

Homeowner Sonia says she has considered the downsides to owning her property, but that if her employment circumstances change she ‘could always sell her apartment’.

However, Keens cautions against this assumption.

“Sit back and rent, it’s safer than getting in there,” he said.