Renting still more affordable than buying
Suggestions that rising rents are making buying increasingly attractive to aspiring property buyers have been dismissed by RP Data’s senior research analyst Cameron Kusher.
As rental prices continue to climb some industry figures have suggested the rising cost of renting could prompt many aspiring first time buyers to consider buying.
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Rental prices have already increased by around four per cent this year and are forecast to continue growing as the year moves on.
But Mr Kusher told Smart Property Investment it would be a long time before the cost of buying reached parity with renting.
“At the moment it is still a lot more affordable to rent than it is to pay off a mortgage because of where interest rates are,” he said.
Mr Kusher said it was likely to be at least 18 to 24 months before buying property would start to appear relatively more affordable than or as affordable as renting.
“If we keep seeing that rental growth and wages and household incomes increasing at some point then people might start to think they won’t be that much worse off getting a mortgage,” he said.
“That’s when you’ll start to see first home buyer activity pick up.”
