Culture, economics, the property market and a ton of other factors are influencing factors to this question. Typically, when Australians speak about the Australian dream, they are referring to owning their own home. Some believe it is better to pay off your own mortgage and someday have a property that belongs to you! Every person has their own view and dreams that will influence their decision. Owning your own home is about making a lifestyle choice that has implications for your daily life.
The table below offers some advantages and disadvantages that may be useful, to consider this question:
ADVANTAGES
Renting
Owning
No long-term financial commitments to worry about
No need to save for a deposit
Remain financially free, with no debt or mortgage
Freedom to move around freely without costs of buying and selling a property
All repairs and maintenance are paid by the Landlord
Even when you cannot afford to buy in an area you can afford to rent
You can determine the level of rent that you pay over time but you have no control over the interest rate of a loan
You channel your rent money into the ownership of a property
Owning property allows you to financially benefit from increased property values. Over time, increased equity can be used to buy another property
Any improvements in your property add value to the property you own
Changing address is entirely up to you not the Landlord
You don’t need approval to have pets
If required it can be sold and turned into cash relatively fast
Equity achieved over time is yours to keep
You can hang pictures wherever you like
Someday you have an asset you can leave to loved ones
DISADVANTAGES
Renting
Owning
You are vulnerable to the rental market. The less properties on the market the higher the rent
The term of your lease restricts your ability to move quickly if circumstances change
The Landlord chooses when it’s time to move
Restrictions on keeping pets
You are restricted in terms of the improvements you can make
Any investment you make on the property or the gardens are left behind if the Landlord wants the property
Long term commitment associated with the responsibilities of a mortgage
Vulnerable to interest rate fluctuations that if increase quickly can reduce funds available
Costs of buying and selling can be costly
You need to budget for ongoing expenditure like rates, water, and repairs and maintenance
Your budget for purchasing will determine the suburb you live in
Economic situations can drastically influence the value of your property
If property inflation is low, other investments can produce better returns
If you lose your job, you may find it difficult to make your repayments
Your income and the income of your spouse or partner also factor into the equation. The higher the income, the easier to afford a mortgage and you will save a deposit much faster. Higher incomes provide flexibility which fundamentally reduces your risk and exposure.
Daniel Trotter
As a Mortgage Broker at Brisbane Home Loans, Daniel brings experience from both sides of the lending process. He began his career with a major Australian bank and progressed to Credit Officer, where he assessed and approved home loan applications and gained firsthand insight into how lenders evaluate borrowers. After working with several mortgage broking firms, Daniel brought that credit assessment expertise to Brisbane Home Loans, where he focuses on structuring applications correctly, navigating complex lending scenarios and giving clients the strongest opportunity for approval. His experience allows him to approach home lending with an understanding of what happens on the assessor's desk, not just what appears in a lender's product guide.
