An NPV Analysis of Buying versus Renting for Prospective Australian First Home Buyers
نویسندگان
چکیده
This paper explores buying versus renting as an investment decision for a prospective Australian first home buyer, by comparing the NPVs of buying and renting. An ex-post analysis for overlapping 10-year periods from 1983 to 2013 for Australia’s eight capital cities suggests that renting was favourable for the decade from 1983 in most capital cities and buying was favourable from the early 1990s to early 2000s in all capital cities. An ex-ante analysis, using different future scenarios for key variables identified in the ex-post analysis, suggests that in 2013 buying was favourable in Brisbane, Perth, Hobart and Darwin.
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