Should you rent or buy a house? It’s a common question for people living in Perth. Cost has always been a crucial consideration, in 2021, it’s important to acknowledge that the:
The COVID-19 ban on WA rent increases that’s been in place since early March 2020, this ban will be lifted in March 2021. There’s also an undersupply of rental properties at the moment, with vacancy rates at under 1%. This creates the perfect storm for rental price increases, with some analysts forecasting rises up to 20% once the rent increase ban is lifted.
Of course, one of the benefits of renting over buying is lower upfront costs. You only have to come up with a bond to rent a Perth home, which is usually up to 4 week’s rent (plus potentially a pet bond if you own a pet).
On the other hand, when you want to buy, you need to come up with a deposit to get your loan approved. However, there are some government incentives to help you do that.
Eligible first home buyers can access the First Home Owner Grant of $10,000 from the State government.
In addition, if you sign a contract to build a home before March 31, 2021, you’ll also receive an additional $15,000 under the Federal government’s HomeBuilder Scheme if you meet the eligibility requirements. This payment can be used in conjunction with the First Home Owner Grant, giving you $25,000 towards a home deposit.
The final important consideration when deciding whether it’s better to rent or buy a house is your ongoing costs. Renting requires regular repayments to your landlord. Buying involves regular repayments to your lender.
Whether the cost of renting or buying is cheaper will depend on a range of factors, including:
With imminent rental price hikes looming and the existing incentives available to buy, now is a great time to buy in Perth. If you do, every repayment you make will be increasing your ownership of a valuable asset. Rent money on the other hand is “dead money”. It doesn’t build your long-term wealth.
Commodore Homes has been providing a range of affordable house and land packages in Perth for over 25 years. Whether you want to live north or south of the river, we have plenty of options for you to choose from.
Contact us today to find out more about turning your new home dream into reality!
Blog posted: February 25th 2021
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