INDEX TO HELP BUY OR RENT PROPERTY
DECIDING whether it is better to buy or rent might become easier with REIWA and Curtin University launching a new property tool.
The Buy-Rent Index could help determine the best time to buy or rent in the Perth metro region, based on past and current trends in the economic climate.
The Index is based on formulated economic assumptions that help identify the annual house price growth rate required for home ownership to be financially advantageous over renting.
June quarter figures indicate the Perth median house price would need to appreciate by 4.3 per cent annually over the next 10 years for the purchase of a house to be considered financially viable over renting at the median rent.
Since 2002, Perth’s annual growth rate in the median house price has been 6.9 per cent.
REIWA chief executive Neville Pozzi said the Institute was thrilled to have collaborated with Curtin University to help educate and inform the public on the costs and benefits of home ownership versus renting.
“Curtin’s vast academic knowledge has enabled us to harness our research capabilities to produce this helpful tool,” he said.
“In the current economic and property climate, we recognise it can be difficult for West Australians to determine whether or not they should buy or rent.
“This index will provide prospective home owners and renters with an insight into whether it is a good time to buy or rent based on trends in the current market.”
However, Mr Pozzi said the index was a guide only and WA property seekers should carefully consider their personal and financial circumstances before making a decision.
“A potential homebuyer needs to evaluate their current and future personal financial situation, preferences and economic conditions before making a decision,” he said.
“The Buy-Rent Index simply endeavours to analyse the economic and financial components of the buy/rent decision in accordance with mainstream research where the financial viability of the home buying decision is highly dependent on house price appreciation.”