Buying in Darwin may be the smart financial option
Before you pony up for an apartment in Darwin's CBD or a detached property in Wagaman, chances are you'll be asking yourself one question above all others: Should I rent or buy?
Most people might assume renting is the more affordable option, but a recent research paper released by the Reserve Bank of Australia says otherwise.
Is Housing Overvalued?, a paper compiled by Ryan Fox and Peter Tulip, makes the case that based on house price growth over the past decades, renting a home is about as expensive as buying one when you factor in other economic factors.
"To summarise our results, we find that assessments of house prices are sensitive to assumptions about expected capital gains," the paper stated.
"If real house prices were to continue to grow at the average rate of the past six decades, then buying a house now would be about as costly as renting."
In short, the only way that it would make more financial sense to rent instead of buy is if real house price growth falls from its average annual rate of slightly less than 2.5 per cent – a rate that has remained steady since 1955.
With that in mind, now might be the perfect time to consider your property options in the Northern Territory's capital city.