Cheaper to own? 300 suburbs where home ownership beats renting
Houses and units in more than 300 suburbs nationwide are now cheaper to buy than rent, with Darwin and Perth spoiling buyers with the most options across the capital cities.
A new report by Compare the Market found that buying a house or unit is now cheaper than renting in 300 Australian suburbs.
The report analysed over 4,000 suburbs using CoreLogic’s median home price in the areas, with a 20 per cent deposit and an average variable rate of 5.99 per cent over a 30-year loan term with no fees.
The analysis excluded additional costs such as strata fees, council rates and insurance.
In total, more than 300 suburbs nationwide were listed as being cheaper for home owners than renters.
Compare the Market property expert, Andrew Winter, said that renters should review their property plan.
“If you don’t currently need a lot of space, a unit somewhere central and convenient may be a great stepping stone to kickstart your property journey,” Winter said.
“And, if you’re able to hold onto that property for at least a few years, you’ll generally bank some equity when values go up.”
While most of the 300 suburbs listed as more affordable to buy were in regional areas, capital cities still have pockets where individuals might find it easier to pay a mortgage than rent.
“There are only a handful of places where it’s cheaper to pay off a property than rent one in the capitals and, of course, the more affordable options are units,” Winter said.
“Confidence is returning to the market and we’ve heard that more potential buyers are showing up at open homes in light of last month’s cash rate decision.”
Across the capital cities, Greater Darwin accounted 42 suburbs where buying a house or a unit is cheaper than renting, including Driver, Moulden, Johnston and Rapid Creek.
Darwin also listed the cheapest suburbs across capital cities, with units in Bakewell having monthly mortgage repayments of $1,346 compared to a median monthly rent of $2,171.
With 39 suburbs listed as cheaper to buy than rent, Perth offers unit buyers a range of areas with monthly repayments varying between $1,800 and $2,800.
Top Perth suburbs include Burswood, Currambine, Ellenbrook, East Perth, Northbridge and Shoalwater.
Melbourne rounded the top three for capital cities, listing 16 suburbs where buying a unit is more affordable than renting.
With $1,749 monthly repayment against a monthly rent of $2,386, Carlton is the city’s most affordable area.
Similarly, Travancore, Flemington and Notting Hill in Greater Melbourne provide affordable housing for buyers with a monthly mortgage repayment of around $1,900 compared to a monthly rent approaching $2,300.
While Perth, Darwin and Melbourne offer buyers a wide range of options, Sydney has only eight suburbs where renters are better off buying a unit.
Sydney’s most affordable suburbs listed are Warwick Farm, Villawood, Ultimo, Rosehill, Regents Park, Mascot, Liverpool and Harris Park.
Without surprise, Sydney’s affordable suburbs remain more expensive than the rest of the country, with Mascot being the priciest suburb listed with a monthly mortgage repayment of $4,027.
In the Sunshine State, Brisbane recorded two suburbs where buying a unit is cheaper than renting, in Spring Hill and Goodna.
Conversely to other capital cities, Adelaide and Hobart recorded only one suburb favourable to buyers: Adelaide City and Gagebrook.
CoreLogic’s head of research, Eliza Owen, said the past five years have been tough on renters with rent values increasing by nearly 40 per cent across the country.
“As rents stabilise, this might tip more markets in favour of buying over renting, and understanding the market trends and being prepared to act when the time is right can make all the difference,” Owen said.
She said the research identifies opportunities where people with a 20 per cent deposit may find it easier to buy and enjoy the benefits of home ownership, particularly in areas with high rental demand, where mortgage payments are lower than rental costs.
“These are markets where temporary accommodation might be more in demand, like mining towns with a fly-in-fly-out workforce, or tourist destinations with a more seasonal workforce.”
“Understanding the market trends and being prepared to act when the time is right can make all the difference,” Owen concluded.