More than half of Sydney homebuyers would have been better off renting and investing elsewhere over the past 25 years, according to new research. 9News
The old mindset that renting is dead money has been flipped with new research showing Sydney residents were better off renting than buying in 60 per cent of cases in the past 25 years.
The analysis compared capital gains by individuals who purchased a home with those investing in a leveraged share portfolio, keeping to a savings plan and renting in an area where they could afford to buy.“We would caution against just assuming that home ownership is the only way to create future wealth,” EY chief economist Jo Masters said.
For example: Homebuyers in Woollahra buying in 2007 and selling in 2017 yielded biggest gains to buyers coming out $303,771 ahead of renters. Those who bought in 1998 and sold in 2008 lost out to renting by $608,032.Suburbs where renters came out on top were North Sydney, Mosman and Leichhardt beating ownership 70 per cent of the time.
It’s important to note that when EY remove the ability for the lender to be able to leverage their ASX investment, the results shift in favour of the home owner.
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