"Researchers at EY recently set out to explore whether it is time we changed the narrative around rent versus buy, based on data from the past two decades."
"While the research found that two out of three Sydney residents think renting is a waste of money, economic modelling tells a different story."
In the model, two home seekers were given the same starting capital. One invested in home ownership, with the other renting a similar housing in the same location while also purchasing an ASX200 index fund.
The performance of their combined housing and investment choices over time were then compared. It revealed that the renters that maintained a leveraged investment in the ASX200 were better off than those who owed a property in the same area.
"Rent is no more ‘dead money' than paying interest on a mortgage. We need a strong new narrative about different ways for people to generate wealth while consuming housing as a product, not an investment," the report concluded.
