Buying property in the ACT is a better bet than renting and the capital is primed for price growth in the longer term, say experts.
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This is in contrast to a national report issued by the Reserve Bank of Australia on Monday that forecast that buyers could actually be financially better off renting.
Authors of the discussion paper Ryan Fox and Peter Tulip found that if house prices grew nationally at their historic average pace – about 2.4 per cent – owning a home would be as expensive as renting.
''If prices grow more slowly, as some forecasters predict, the framework used in this paper suggests that the average home buyer would be financially better off renting,'' they said in the report.
The report compared the financial cost of renting a home with the cost of owning a similar dwelling taking in interest rates, repairs and council rates.
Domain Group senior economist Andrew Wilson said there was no evidence to suggest that house prices were not going to maintain their long-term average.
''We're going to have to have some significant long-term deterioration in the value of housing in this country for this to become even a reality,'' Dr Wilson said.
''Even if it was, it would probably self-adjust because a shortage of rental supply would put up rents and then encourage people back to buying again.''
Dr Wilson said there was a lot of pent up demand in the Canberra market which, given an improvement in the ACT economy, would see prices growing again.
''Canberra has been an underperformer – it has underperformed compared to every other capital city in this latest growth phase with the low interest rates,'' he said.
''There is certainly upside potential to Canberra's growth but it does rely on improvement in the local economy. which has been battered from pillar to post.''
But any local improvement would depend on an improvement to the ''federal budget deficit, which has driven a lot of that negativity in Canberra''.
The spokesman for the Real Estate Institute of the ACT, Frank Pompeani, said if people took a long-term view, owning property would always win out over renting.
He said there were many benefits to home ownership including the ability to make improvements on the house to increase its value and tax free capital gains for owner-occupiers.
Mr Pompeani said Canberra's market was set for some price growth as it was anti-cyclical to the Sydney and Melbourne markets, which were starting to slow.
Home owner Andrew Luton described the decision to move out of his rental accommodation and buy a house as a ''no-brainer''.
The 29-year-old public servant, who is a distant relative of Luton Properties principal Richard Luton, had been renting a two-bedroom apartment in Casey for about $400 a week.
He said he was an outdoors kind of person and needed room for his toys, so apartment living had not suited him.
Mr Luton purchased his one-bedroom stand-alone villa in Casey just a week after he first saw it.
''For me it was a no-brainer – why spend $400 a week to give to someone else,'' he said.
''I’m just about 29, so it's nice to have an asset behind me.''
He said while he thought Canberra had turned into a renters' market over the past 12 months, he was glad to have the long-term financial investment of owning his own home.
The mortgage is about the same as what his rent had been.
