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The property market influence

The property market influence

The answer to whether buying or renting is better depends largely on your personal profile and the current conditions of the property market.

When house prices and interest rates are low, the monthly cost of owning a home is more affordable, which makes it a Buyers Market. Low interest rates also result in more affordable rental prices, but as the interest rate rises, so will rental costs.

The interest rate can have a considerable effect on the property market and particularly consumers who are already Homeowners.

If a Homeowner has been offered a fixed interest rate, their monthly bond repayments will not be affected by the interest rates fluctuations. An interest rate which isn’t fixed, however, will have its benefits when the interest rate becomes lower as this results in lower bond repayments. In contrast, bond repayments are equally influenced by the interest rate rising, as this will result in increased bond repayments.

Buying a home rather then renting can be viewed as a better long-term investment. This is because while both a Tenant and Homeowner are subject to interest rate hikes, the Homeowner is paying towards their own property, and a Tenant receives no tangible benefits at the end of the lease. Buying a property is seen as a good investment as it offers the possibility of financial growth.

Rent vs buy a home - Infographic

Pros and cons of buying and renting