08.06.2016 To buy or to rent that is the question

08.06.2016 To buy or to rent that is the question

Today you see a lot of people voice their concerns about the high cost of city rents. Experts in real estate industry and economists share their concerns but would they be better of paying high rent premiums or buying a home? The research shows that today it is more expensive to buy a home then to rent where buying a home commands a 17% premium. The old assumptions that in a long terms its better to pay for your own home then to pay to the landlord is no longer valid. Despite lowest interest rates in history and favourable mortgage terms the house prices are so high that they overshadow rents buy a big margin. Indeed the harsh reality is that even if you control for the cost of cheap capital its still cheaper to bear a burden of highest rent in history. One may argue that owning a home still contributes to your net wealth, but the risk of crashing of the overheated house market risks loosing it all.

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