The question of renting vs owning has undoubtedly been on the minds of home buyers since the dawn of property rights. And the question still continues to be asked today, is my money better spent with the lenders or the landlord?

Well, economists Dominic Crowley and Shuyun May Li conducted a 20 year study of 8 Australian capital cities in the search for an answer to this question, and the overall winner was:

…the owners.

The combined costs of stamp duty, loan interest, maintenance, strata levies and local council charges are still not high enough to keep home ownership from being the more financially viable option for most years, in most Australia capital cities.

But as with all things investing, the true rewards go to those who understand market conditions and can time the market. As the decade commencing 1983 was clearly a renters era, with the tide turning towards owners in the early 90s. In fact, over the 20 years of the study Melbourne has favoured the renters for 75% of the time, and Sydney 55% of the time. The only capital city to favour the buyers the entirety of the 20 years was Darwin.

So, as far as take home lessons go, not only does understanding the market conditions bring its rewards, but further, something that we’ve known all along, is that low interest rates make property ownership a financially lucrative option. If you add well-researched properties in high-growth areas to the equation then investment properties can be an outright rewarding investment, and finding those, of course is our forte… and if you’re feeling like 2017 is a good time to begin your property investment journey then talk to us today on 1300 883 920.

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