Should You Buy or Rent A House In Australia 2023? (Detailed Calculations)

Whether to buy or rent a house in 2023 is a huge decision especially with the current housing market and economy. In this video we break down the financial, practical, and emotional aspects of each option so you can make an informed choice.
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▼ ▽ BUY VS RENT MODEL
Link to Model - bit.ly/3YMqhUl
▼ ▽ TIMESTAMPS
0:00 Intro
1:46 Assumption Overview
2:07 Property Assumptions
4:13 Rental Assumptions
5:13 Common Assumptions
6:40 Model Walkthrough
10:33 Results!
▼ ▽ LINKS
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▼ ▽ CONTACT
📩 Business inquires → [e-mail]

[@dinlmiteyy]

Great video and channel. Stay consistent Raymond, the views and subs will come with this level of effort being put into your videos!

[@raymondla]

Thanks for that awesome feedback mate!

[@javinbalance]

Awesome video and explanation! this solves so many questions I had and knowing that the breakeven point is around the 5-6 year mark will be so helpful to make my financial decisions!

[@raymondla]

Glad it was helpful!

[@zamasu_777]

I think buying is probably better for most Aussies as it’s forced savings. Most would say that put aside money while renting but wouldn’t in reality

[@raymondla]

Very good point on that one, I'd say the average aussie won't consistently save and invest

[@lamkaz810]

Another benefit of buying and building equity in your own home/investment property is the added borrowing capacity at lower interest rates. The property is more desirable by lending institutions over an ETF portfolio.

[@raymondla]

Definitely a valid point, ability to draw down and use the equity built in property is definitely a huge benefit.

[@maxhunts_]

@@raymondla It is but your also going backwards..

[@frankboadi1031]

Not entirely true

[@venkateshchagi2944]

Excellent Video, Thank you for your efforts!!

[@VBHob]

Sorry but that music is very distracting

[@TheComicVault]

So once you include maintenance and the fact that you’re no longer eligible for 1st home buyer grants in later life (presumptively), then you break even after 30 or so years…

[@AAA-oy4tm]

5% per annum is unrealistic The house prices are already through the roof, based on 5% per annum a 3 bedroom townhouse in western suburbs is going to cost 1.85 mill by 2050! Which is not correct! The house has wear and tear, right now in the same area same size land, brand new house costs 20 to 30 percent more than 30 years old house You have to calculate that too, calculating the interest for 30 years based on current interest rates you already have paid 1.6 mill for a 750k house in 30 years, with renting if you loose job (like Covid time) you have the option to opt in for unit but if you buy and can’t afford to maintain the loan you got to sell under price and loose deposit. If the market was stable yes but Australian housing market has crazy fluctuations and is unpredictable If you rent small place 30 km from the city and pay around 1300 rent you can save 3300 per month, even not investing and just keeping in bank and getting interest you will have nearly 900k savings in 20 years The system here is build somehow that it’s tight and the only way buying makes sense is when you are able to pay 60 to 70 percent deposit in an area that are low in air pollution and away from factories which is Eastern melbourne which costs around 1.4 mill and 60 percent of that is around 800k It’s more complex than just expecting the best case scenario.

[@NakEdits]

Thanks for you videos I’m sure you’re channel will blow up shortly!

[@raymondla]

Glad you're enjoying the videos Riley! I hope so too haha!

[@Paulio727]

The main thing missing here is the cgt tax exemption from the principal place of residence

[@javinbalance]

correct! or deducting cgt to the etf/stock investment portfolio unless you wait for retirement

[@azza2k]

Hey Raymond, what about buying an investment property, renting it out (positively geared where possible) and then renting where you want to live? (Rentvesting)

[@raymondla]

Hey Aaron, potentially a good option to consider especially if you are currently priced out of where you'd ideally want to live for your PPOR.

[@Christopher-hv3xj]

Very nice, in weekly savings do we include our current rent amount?

[@user-uf8og2bh4e]

Im renting a 2million house in sydney 500 per week. owner has been good ( 10km from CBD) Do i buy a 1 million dollar property and pay 1200-1500 per week? location would 50 kms from CBD

[@henrynguyen4315]

Probably wouldnt really apply with buying a unit i reckon with the extra council fees etc haha

[@TheSchmidtish]

5% compounded growth of an astronomically over priced housing market is a massive assumption. Make the logical 30% correction on your $750k house price and you're $225k into negative equity in the next 5yrs...

[@phillipgraham4226]

That's also an assumption 🙂

[@m.ehtizan]

Hey Raymond, I just watched your video and I must say that it was really informative and well-made. I loved your videos. I was wondering if I could help you edit your videos and also make highly engaging shorts for you to grow your business.

[@raymondla]

I appreciate that feedback! Unfortunately at this point in time as I'm still a small creator I'm not looking to bring on an editor, perhaps in the future though :)

[@sdeane09]

Best option is rent vest for up to the first 6 years.

[@TheComicVault]

Actually longer. Once you include your buying power increase and maintenance costs, it’s closer to 15 years.

[@sdeane09]

@@TheComicVault anything over 6 years and you are liable for CGT though.

[@TheComicVault]

@@sdeane09 you’re always liable for CGT, in some instances CGT may be discounted - like after 12 months of residing within the property (look into it though).

[@sdeane09]

@@TheComicVault not if you do not have another primary residence and is under six years. Did it with my house

[@rockandblues3635]

trust me buying is the best

[@DefinitelyNotRin]

You should try to buy EVENTUALLY. But do it when the time is right and when you can afford it. More than anything people are desperate to buy based off bad advice when you're fine renting for the time being.

[@rockandblues3635]

@@DefinitelyNotRin @ I don't understand with people with good income but keep renting till they retired no house at all

[@frankboadi1031]

I will rent than buy. The numbers just don’t make sense

[@rockandblues3635]

when you rent you pay someone else property, I bought a house a year ago and now the price of my house is double, I rent for more than 25 years move from one place to another but finally I able buy a house with 4 bedroomr, 2 locked garage, 1400m2 land , I rent out 3 of bedroom, guess what? my tenant pay my mortgage

[@dsinghr]

You cannot buy anything in 750k in Melbourne east. May be an apartment but that’s it