The housing market in Australia has exploded in recent years, with much of the focus on soaring house prices.

But, not to be outdone, the rental market is also shattering records, with historically low and high vacancy rates, as well as rising rental rates. Because people may work from anyplace remotely, the working-from-home phenomena has caused many people to relocate to areas with a better work/life balance. However, this has proven to be a popular move, with demand considerably outstripping supply, causing vacancy rates to drop and rents to rise.

So, is it time to buy a house and stop making rent payments?

Is it time to make a property purchase?

Trying to decide whether to continue renting or buy a home?

House prices have risen rapidly this year, but the rate of increase moderated in April and is expected to continue. The fact that interest rates are at their lowest point in history is a boon to prospective purchasers, as it may be cheaper to buy than to rent in some situations.

Your location and personal circumstances will determine whether or not it is time to buy. Keep in mind that buying your own house provides you more freedom to do whatever you want with it while also increasing your equity.

Buying a home vs. renting has a number of advantages

If you’re still debating whether or not to buy a home, consider the following arguments in favour of doing so:

1. You will build equity

Your rent payments increase your landlord’s equity, not yours. Instead of enriching your landlord, you can put the money towards your own mortgage when you buy your own home. You will eventually become wealthier as you pay off your own mortgage.

2. You gain independence 

When you own your own home, you don’t have to worry about your landlord telling you that you can’t alter the colour of the walls, that you can’t have the open space you want, or that you can’t drill holes in the walls to hang your photos. Your decorating possibilities in a rented place are restricted, but they considerably expand if you own the home.

3. No pet restrictions

Many landlords forbid renters from having pets. If you have a pet, this can severely limit your options for housing. Other landlords will allow pets to live with you but will demand a fee for it. These issues will not arise if you own your own home.

4. The value of your house may appreciate

There’s a good probability that the value of your home will rise over time, and in some cases, it may rise dramatically.

5. There’s a sense of stability

Having your own house provides security. You understand that you can stay as long as you wish and that you have become a stakeholder in your neighbourhood. This helps you and your family to form long-term bonds with others in the community.

6. The house will be yours

Having a home offers you a sense of accomplishment. You will own a home after years of paying your mortgage, which you will be able to retire in and eventually pass on to your family.

Check out our borrowing power calculator to see how much you could borrow with Homestar.

 

Disclaimer: This article is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered Australian legal practitioner or financial or investment advisor.