Are people better off buying their own home rather than renting? Research from Monash Business School suggests buying may not always be the answer.
Research from Monash Business School’s Dr Luc Borrowman, Dr Gennadi Kazakevitch and Alyssa Cameron, shows that with housing stress on the rise, buying may not always the best option for all Australians.
“Especially when looking at the lower income brackets we find there is a positive welfare relationship for renting compared to homeownership,” says Dr Borrowman.
“This is because of the flexibility of the market. It allows those more vulnerable and in more insecure job markets to change their housing costs more readily or can move closer to their job location.”
Renters also escape many of the hidden costs of owning a home, he says, such as repairs and maintenance, council rates and sewerage rates.
Rather than home ownership being a key determinant of household welfare, the research shows that the length of time a family stays in a house has more of an impact.
“Given this, governments should implement policies that strengthen the security of tenure for renters,” says Dr Kazakevitch.