Melbourne’s housing market is one of the best performing in the country, so as a first home buyer is it better to buy or rent? You used to be able to buy a house for just 3 years’ worth of your income, but with Melbourne metropolitan median housing prices over $800,000 and the average Australian wage at $78,000, people are finding it harder and harder to get into the property market.
For years, getting in the property market was a vital part of becoming a successful adult, but lately, that concept has changed. Experts now say renting for life is a financially sound option, especially when compared with taking on a crippling mortgage or a home that may not prove a sound investment. So, in this confusing, politically charged landscape, what exactly should you do?
The idea that renting is throwing money away can be a bit of a misconception. It isn’t a waste of funds if you have somewhere to live.
With properties being so high in price and rent still affordable in many cases in can be more viable to rent over buying. I see it almost every day in real estate properties worth upwards of a million dollars and are being rented for under $450P/W, where’s a mortgage of just $600,000 can cost you $700P/W on today’s interest rates over 30 years.
What you don’t want to do is rush into buying a home before you can afford it. If your mortgage repayments are too high, there’s a serious risk you could be left house poor. Many people who choose home ownership are being pushed further out and have a diminished quality of life. The ability to get around because of traffic congestion or long journey to work are things to factor in.
To put it simply It can put quite substantial stress on households. You also must consider your lifestyle. Most younger people want to live in the inner city, where they work and socialise, and where most of the entertainment is found. However, with inner city suburbs being sky high, most younger people can’t buy close to town because it’s so expensive, so renting is the only option.
Ultimately, you need weigh up your options, home ownership can be very beneficial and rewarding, but it isn’t the only viable option anymore. Considerer your life style, travel, and income; seek advice every one’s situation is different, and you can always invest your money elsewhere.
The first step is finding out what the average rent and sales price are where you are looking.
