As interest rates fall, and house prices surge again, is renting a better long-term option? We asked a few experts to find out.
Prices are on the rise again after three interest rate cuts this year, with Sydney's median price pushing $900,000.Even in the cheaper capital cities, you will still need around $500,000 if you want a place to call your own.It found that renters could be up to $600,000 better off over a 10-year period in some of the wealthier suburbs. Even in less salubrious surroundings, $200,000 to $300,000 was not uncommon."They'd also rented where they could afford to buy.
"They invested in a leveraged share portfolio, and they also maintained quite a stringent saving plan." They also did their renting at a time when house prices were not skyrocketing, such as the late 1990s into the early 2000s.Not everyone is convinced though, such as long-time independent financial adviser Suzanne Haddan, the founder of Sydney-based BFG Financial."Other things come along the way, such as a trip [or a] new car — that can mean you don't end up wealthier based on that scenario," she said.
Then there is the leveraged share portfolio Ms Masters referred to, which generates the income for the renters to get ahead. Margin loans are highly risky, which was demonstrated when thousands of people had their investments wiped out during the global financial crisis.
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