Costs to rent or buy near parity: ABS

According to the Australian Bureau of Statistics (ABS), the costs associated with renting or owning a home are on par.

Figures from ABS show the Australian mortgage holder currently pays 18% of their gross income towards their housing, while renters are paying 17%.

Over the past 13 years, housing costs for mortgage holders rose by $112 per week, which represents an average annual growth rate of 2.7%. Meanwhile the cost of renting over the 13 years has increased from $169 per week to $237 per week - an average annual growth rate of 2.6%.

Over the same period median dwelling values have grown at 5.6% per annum and household income has grown by 3.1% annually.

RP Data’s research analyst Cameron Kusher said this meant that those who had bought a property in 1994-95, were now better off financially than those who chose to rent.

“The average cost of housing has increased by $112 per week however, the household income has increased by $545 per week (net position +$433 per week), and the value of each property has increased by approximately $202,000 providing significant additional equity,” Mr Kusher said.

“If you were renting, you have also seen your household income grow by $545 per week, whilst housing costs have increased by $68 per week (net position +$477 per week).

In their pocket, renters enjoy much more money than those with a mortgage however, renters have missed out on the $202,000 increase in property values and the resulting equity position and potential to re-invest such growth in value affords.”