renting : dead money ?, page-30

Unless you're reasonably wealthy, you're either renting a house, or renting money. Except, with renting a house, you're paying something like 3% (once you consider the rates, body corporate, water charges you don't pay) on the price of the property. With buying, you're paying 5% (at a very low ebb for interest rates) to rent the money with which you purchased the property. Even if you didn't purchase the property, you lose the opportunity cost of investing elsewhere.

In a rising market, of course buying can be (and has been for many in this country) more lucrative than investing elsewhere. But in this housing market, where genuine owners are scarce on the ground, and the speculation is fuelled mostly by a combiantion of low interest rates and irrational optimism about our economy, renting a house is far smarter than renting money to buy a house.