Home Property Do You Rent Or Own Your Home? - The Question Facing 1st...

Do You Rent Or Own Your Home? – The Question Facing 1st Time Home Buyers

Dato’ Stewart LaBrooy is the Chairman of AREA Real Estate Advisory Pte. Ltd.

The question hardly seems worth asking. Is it a better deal to rent a house or to buy one? Parents are always telling their children that buying a house is a wise investment for their future, whereas renting one amounts to little more than throwing money down the drain. A closer look at the economics however, shows that this view may be very mistaken.

We must be mindful that the first-time home occupier with a limited disposal income will often devote a smaller share of their income to rent than as an owner-occupier who will have to devote a larger portion to the repayments of their mortgage (in both cases, this is
money handed over to someone else and is never seen again). Thus, which is the better scheme will depend on the prevailing interest rates.

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