IN­DEX TO HELP BUY OR RENT PROP­ERTY

The Advocate (Perth) - - RESIDENTIAL -

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.”

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