Depending on where you live and your income, buying can be a great investment right now, but even if you have the savings, there are drawbacks to buying. Rental properties have also seen a shift in prices and availability, which makes finding a rental a difficult venture. For the lowdown on whether buying or renting is for you, we have some things you need to think about before making any decisions.
Buying a home
Con. Right now, the housing market in Australia is highly competitive and the high prices of this market are reflected in the homes and rentals that are available. Although the prices are particularly high close to the city in Sydney, Melbourne, Perth and Brisbane, the suburbs are also feeling the price crunch.
Pro. If you have the 10% required for a down payment on a home, then you are ahead of many people who don’t have enough saved to purchase a home. This means that you have an opportunity to ‘invest’ in the housing market. You have to remember that the market fluctuates, so your investment can either be a loss or a gain.
Con. What the higher prices mean is that this is a seller’s market and any house that is listed is going to get their listed asking price, so there is little room for negotiations when trying to purchase a home.
Pro. Once you own your home, you can make any renovations you want, unlike renting where the space has to stay in the same condition when you leave. Owning your home will continue to build equity.
Renting a flat or apartment
Pro. If location is important, then renting is a great alternative. Finding a rental in the city is much easier than looking to purchase a home. Not only are less homes available in the city, but you can also find a roommate to split the cost of living in a desirable location.
Con. With the housing competition affecting apartments and rentals alike, you can expect 10 to 20 other people to show up looking at the same apartment once it it listed. This means that landlords and property managers can inflate the rent and still secure tenants.
Pro. Even if finding an apartment is highly competitive, if you are unhappy with where you are living or if you get transferred and need to move quickly, renting gives you flexibility that owning doesn’t.