Rent vs Buy

Advantages

- Long term control over dwelling expenses

- Control over dwelling

- Stability in lifestyle

- Increase in house price

- Capital gains are not taxed

- Cheap interest rates

- Tangible

Disadvantages

- All eggs are in one basket. - Tied into one asset

- Demographics of the suburb may change. Supply and Demand factors in that area.

- Not diversified into the residential sector because of one asset.

- You cannot invest into other assets such as bonds, shares etc.

- Its not divisible. Shares can change investment increments however I cannot just sell "portion" of the house.

- Not many low value properties. Apartment prices in Sydney are growing.

- High entry fees, exit fees - Stamp Duty. Agent commissions, Advertisements, Legal Fees

- General Fees are high compared to other investments. Which mean lower flexibility to downgrade or upgrade,

Rent vs Buy

Long term geared investment into a diversified portfolio is expected to out perform buying a house. Borrowing money to invest in quality managed shares. This approach will accumulate more wealth in the long term.

However because of the rising house prices, and buying a house is gives you more stability and people are generally not disciplined, therefore it can be argued that buying a house is better. You can control your living circumstances.

It will be certainly better to buy a house if the price of houses are expected to rise. It is important to compare apples to apples.