The life-long question of whether to rent or buy a home makes a heavy appearance in every adult’s life. There is always that issue of comparing monthly fees as well as short-term and long-term benefits. It’s a long process that needs analysis, proper financing, and an in-depth follow-up of the local property market.
The common sense scale tips in the favor of buying a home, and here’s why:
1) You will eventually own it
With owning a house, you will stop paying back that loan and mortgage at some point, unlike rent fee which is an ongoing turmoil. The money you had been pouring in will come back to you in the form of a home.
2) Running costs and changes
It is a good idea to also consider running costs and any changes you make in a home. If you tear up the flooring of a rented house and replace it, you’d be throwing money down the drain. In your own home, however, that could be considered an investment should you choose to sell the house later on.
3) Oil Prices
Strike while the iron is hot and take advantage of the market. It is no secret that the oil market has seen better times. With the plummet that began in 2014, property prices have gone down to become more affordable. However, it would appear that many did not do the math and realize that buying a house would be lighter on their wallets.
4) Supply and demand
Towers, complexes, and communities are popping up left and right in the GCC. It would seem that every month or so, a new development is in play. In some areas, supply outweighs demand, it is dawning on property owners that supply is abundant. This may cause property prices to go down in an attempt to sell.
Globally, there is a distinct movement towards owning homes, with the number of homeowners reaching 64 percent in England and Wales.
Things don’t look quite the same in the GCC, where Propertyfinder’s latest poll suggests that more UAE residents prefer to rent. This is despite the falling property prices in the UAE.
This is mainly because they are unable to come up with the down payment or could not qualify for a loan.
Furthermore, many foreigners who don’t plan on staying for more than a few years, or feel like their jobs are unstable, would rather rent for the duration of their stay.
This would perhaps be different if down payments, fees, mortgages, and loans would be more lenient in favor of both locals and foreigners. Studies have shown that once a buyer manages that feared down payment, monthly mortgage is a breeze.
It must be noted that monthly mortgage for an owned home can sometimes be higher than a rented one. Long-term, however, owning a home will cost you less than renting for years.
If you are unsure about your decision, accept a lending hand from a website dedicated to doing the math. SmartAsset provides a solid analytical approach for comparing between both options, weighing it out using monthly fees, interest, and duration of stay.