The
RBA has claimed Aussies may be better off renting if house price growth slows.
A new discussion paper by the Reserve Bank has delved into whether Australians are better off buying or renting. According to the paper, if house prices appreciate accoding to historical trends, buying would be about as costly as renting. But if house price growth slows to a pace below the historical average, the paper claimed the average home buyer would be better off renting.
"Many observers have suggested that future house price growth is likely to be somewhat less than [the] historic average. In that case, at current prices, rents, interest rates and so on, the average household is probably financially better off renting than buying," the paper said.
The RBA did note the limitations of the study, particularly that the paper focused only on whether households were financially better off buying or renting.
"The decision to buy rather than rent also reflects subjective factors that are difficult to measure such as security of tenure, freedom to renovate, access to finance, pride of ownership, the risk of capital losses and the flexibility of moving," the paper said.
