With the shifts in the property market, most consumers are hard-pressed to decide whether they should continue renting a house or decide if its time to buy a property. According to the new RP Data report, the difference between buying and renting a house is dependent on the area. For instance, Victoria homes record the lowest difference at an averate of $32.96. Meanwhile, in Western Australia home buying can save you as much as $916.10.
On a state-by-state basis, buying NSW properties for sale can save you as much as $107.31 per month. In Queensland, savings average at $231.63 per month. In Victoria, real estate purchase will save you only $32.96. Australian Capital Territory real estate purchase will save you about $173.50 over renting. South Australia averages at $73, North Territory at 211.67 and Western Australia at $916.10.
This difference is affected by the current trend in property values as well as interest rates reaching a45-year low. Rent rates, on the other hand, have shown dramatic growth in this market.
In addition to location, property type is also a consideration when comparing real estate purchase vs renting. Studies show that units show a bigger difference in mortgage and rental rates.
Additionally, tax benefits from homeownership can increase the difference in rates between paying for your own real estate and renting one.
Rent control is another issue that affects this price. While you can get your mortgage payment locked down to a fixed rate or even lower it with a refinance, rent tends to increase on an annual basis. On average, rent that isn’t controlled can increase up to 5% every year. Putting this numbers together, if you continue renting for six years, your rent payment will most likely exceed your possible mortgage payment.
Aside from the difference in costs, buying real estate property also has significant benefits over renting. Property builds equity, which means the resale value can be higher than what you bought it for. This makes it a better investment than a car or other major purchases. Owning your own home can also give you a sense of stability and security.
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