Is it cheaper to rent or buy?

WHILE renting may seem the cheaper alternative to buying a home, new figures have revealed it can end up costing pretty much the same over the long term — and you’ve got nothing to sell at the end.

The figures collated by finder.com.au reveal that renting a house over 30 years will cost you almost $1 million, while buying a house at today’s current median house price will end up costing about $1.2 million.

Michelle Hutchison from Finder.com.au said the figures showed it was worth considering buying a home instead of wasting dead money renting.

“If you are renting that money has paid for someone else’s investment,’’ she said.

She said the total cost for a house based on the national median house price with a 30-year loan term was more than $1.2 million.

“Compared to renting, the national median weekly rent for a house is currently $424, which equates to about $998,830 over 30 years (adding current inflation of 2.7 per cent p.a.),’’ she said.

Ms Hutchison said it can be a tough decision to choose between renting and buying a home.

“The question to stay renting or to enter the property market is a constant struggle for many Australians because of property prices, saving for a deposit and uncertainty of interest rates,’’ she said.

“But if you compare the likely cost of rent for the next 30 years, it’s worth considering buying a home.’’

With the current low interest rate environment Ms Hutchison said it was more affordable to maintain a mortgage now than it was tHicks Real Estatee years ago.

She said while buyers were concerned about affordability, it was still a good time to enter the market because interest rates were low.

According to figures from RP Data Darwin has the highest median asking rent in Australia for houses at $650 a week.

Where the renters are

Darwin — 43.2%

Canberra — 31.0%

Sydney — 32.4%

Perth — 28.2%

Brisbane — 33.7%

Melbourne — 28.0%

Adelaide — 28.8%

Greater Hobart — 28.2%

Source: RP Data