Buying vs renting in a temporary city
Morning all
I would be grateful for some opinions as to whether we should be renting or buying in a city we are not staying in for the long term.
My partner and I have to move for work for a period of three years to another city - a city that we like but certainly not a forever city. We are both good earners with a HHI of 400k a year in an industry with very strong job security. That income is guaranteed to increase yearly as per our work contracts. We are also sitting on a large deposit of ~500k. The types of houses we would be interested in are around 800k to 1 mil, while rent is likely around the 700-800 a week mark. This would be our first house.
We have no plans for kids
Essentially my question is: Does it make sense from a pure net worth perspective at the end of the three years to rent or buy here?
I would be working off the assumption that house prices are going to be flat or show annual increases in the low single percents over the next few years. Fair enough if your perspective varies.
Obviously renting is classically seen as money down the drain, but you avoid rates, maintenance, interest costs, REA and lawyers fees with buying and selling. And that deposit money could be making money elsewhere.