IS IT BETTER TO RENT OR OWN A HOME IN 2022?
There’s been an overwhelming amount of information out there at the moment about the property market in Perth. Now more than ever, the renting vs buying decision is a tough dilemma for most young Australians. As WA faces unprecedented surges in rental prices, we’ve seen an increasing amount of interest in buying homes. If you aren’t sure about starting your homeownership journey, there are many different factors to consider, and no one size fits all answer, unfortunately.
The good news? We have over 10 years of experience getting first homebuyers to achieve their dreams of homeownership. We’ve seen it all, so we’ve put together some handy information to help you decide on whether to rent or buy your next home.
IS IT BETTER TO RENT OR OWN A HOME IN 2022?
Although the answer to the question, “is it better to rent or own a home” depends on your life goals and financial situation, we believe that overall it’s an excellent time to buy.
The rental market is becoming increasingly less affordable, and conditions for tenants are worsening by the day. On the other hand, affordability for homeowners is improving, and there are financial assistance options to make it easier for first home buyers to enter the market.
If ever there was a smart time to buy a home in Perth, it’s now. Keep reading as we further explain some of the factors to consider.
RENTING VS BUYING: FACTORS TO CONSIDER
Current market conditions
As the Australian property market recovers from the economic recession bought about by the pandemic, we’re seeing signs of solid buying conditions.
Some of these signs include:
- Record low-interest rates
- Property prices set to continue rising
- Rental prices surging up to 14.6 per cent higher in Perth
These market factors may mean that more than half of the homes in Australia will be cheaper to buy than rent in the next 10 years. If you’re sick of renting, there’s never been a better time to consider buying. Convert your rent to find out if you qualify to start building your home here.
Cost of owning a home vs renting
While renting, the landlord pays for costs such as rates and is responsible for repairs and general maintenance. On the other hand, expenses involved in buying a house include stamp duty, other additional purchasing costs and of course, the ongoing running costs of owning and maintaining a property. So overall, there can be costs involved with owning a home.
Have you ever heard the phrase ”rent money is dead money?”. Although renting can sometimes be a cheaper upfront cost, your rent money is going towards paying off someone else’s mortgage. While some may consider interest repayments to also be dead money, mortgage repayments go towards paying off her house and building up an investment that will increase in value in the future.
Financial and personal security
The answer to the “should I rent or buy” question comes down to more than numbers. It’s about what you want from your future and your finances.
If your priority is security and stability, owning a home is the way to go. When it comes to your finances, there is a good amount of certainty about her repayments, especially with a fixed rate home loan when it comes to your finances.
If you’re looking for flexibility, you can achieve a fair amount through renting however, you are subject to varying rental prices due to rental property supply and demand. When you purchase your own home, you have the freedom to paint, renovate and landscape at any time without needing to ask permission from your landlord or breaching your lease.
Homeownership is more affordable than you think! You can build your own home for the price you’re paying in rent. Try our rent conversion calculator today.
Depending on your property and the market in your local area, your house may increase in value over the long term, at a rate greater than inflation. You can also leverage your house if you wish to expand your investment portfolio.
While renting, you can, of course, pursue other investment opportunities. This depends on the rent price (likely to keep increasing) and the amount of budget you have leftover.
First home buyers
If you’re looking to buy your first home, different financial assistance options are available to you. In Western Australia, first home buyers are eligible for a grant of $10,000 who buy or build a new property. The WA Government also offers the Home Buyer Assistance Account, a stamp duty concession for first-home buyers up to a certain threshold. Unfortunately, financial assistance does not apply to renters in this circumstance.
BUYING WITH FIRST HOME BUYERS DIRECT
At First Home Buyers Direct, it’s our mission to get as many people as possible into a brand new home of their own. If you are feeling uncertain, our dedicated team is here to support you throughout the entire process, and they’ll be happy to use their expertise to guide your decision making.
Building your own home is much easier than you might think, thanks to our house and land packages that can be cheaper than renting. From as little as $249 a week, you can own your home!
We also have a handy rent conversion calculator that can help you determine if you can afford to get into your first home. Get started on your home building journey with us today.
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