Many homeowners would be better off renting

Not all Australians are better off buying a home rather than renting, according to surprising research by EY today.

According to the research, 60 per cent of Sydney residents are better off renting and investing in shares, rather than buying a house.

Jo Masters, chief economist for EY, told 3AW Breakfast that we need to broaden the conversation beyond the assumption that home ownership is the only way to get ahead.

“We’ve got this cultural desire and push for home ownership,” she said.

“What our research shows is that there are other alternatives.”

But if renters want to get ahead they’ll need to save wisely.

“You can’t have it all. If you want to create wealth for the future you still have to make sacrifices and savings and investment plans today,” Ms Masters said.

Renters who got ahead were assumed to have saved the same amount of money that the homeowners had for a deposit, and had taken out a loan to buy shares. They also rented where they could afford to buy and saved the difference between what they were paying in rent and what their mortgage would be.