All Topics / General Property / Cheaper to buy then rent.

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  • Profile photo of insanoinsano
    Participant
    @insano
    Join Date: 2009
    Post Count: 34

    Saw this article on the news and just thought it might be handy for those that didn't catch it…

    http://www.myrp.com.au/buyorrent

    Despite the rising number of renters across the country, it's more affordable to buy in 238 postcodes, based on a principal and interest loan with a variable mortgage rate.

    Using an interest only loan, the list expands to 1320 suburbs and towns.

    Experts say escalating rents, falling house prices and recent rate cuts have contributed to more favourable conditions for paying off a home loan than paying a landlord.

    RP Data’s annual Buy versus Rent report shows that Queensland has the most places where it’s more affordable to buy; Brisbane has 16 suburbs while in the regional areas of the state there are 68 towns.

    Buying vs. renting: See the full list of suburbs here

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    Related Coverage

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    New South Wales has 54 suburbs; 22 are in Sydney, while the remaining 32 are in the regional parts of the state.

    Victoria has just 10 areas where a property is now cheaper to buy than rent, with two suburbs in Melbourne and eight in regional belts.

    One of Australia’s most affordable housing markets, Adelaide, has 20 suburbs where buying is currently cheaper than renting, while there are three regional South Australian towns that qualify.

    Hobart has 12, compared to 13 in regional Tasmania, and Canberra has just one suburb where it’s cheaper to buy.

    Western Australia has 35; three in Perth with the remaining 32 largely in the state’s resource-driven areas.

    In the Northern Territory, Darwin has no suburbs where it’s cheaper to buy, while there are six in regional areas of the Territory.

    Tim Lawless RP Data research director said house price and interest rate falls had contributed to making home ownership more affordable than renting in many areas.

    “Nationally, capital city home values have fallen by 5.9 per cent from the October 2010 peak. These conditions, in conjunction with discounted variable mortgage rates falling by around 100 basis points since October last year, have resulted in improved housing affordability,” Mr Lawless said.

    “With lower mortgage rates, tight rental markets resulting in some rental increases, and lower home values, many buyers may see now it as a good time to either re-enter the market or buy their first home.”

    The RP Data research is based on costs involved in servicing a mortgage on median house and unit values compared with median asking rents across each suburb and town across the country.

    Top suburbs for buying over renting

    SYDNEY

    Warwick Farm

    Campbelltown

    Rushcutters Bay

    Mount Druitt

    Ambarvale

    MELBOURNE

    Carlton

    Dallas

    BRISBANE

    Bundamba

    Boronia Heights

    Bellbird Park

    Brisbane CBD

    Woodridge

    ADELAIDE

    Gilles Plain

    Elizabeth Downs

    Elizabeth East

    Davoren Park

    Munno Park

    PERTH

    Mount Hawthorn

    Burswood

    Perth CBD

    HOBART

    Herdsman Cove

    Risdon Vale

    Gagebrook

    Chigwell

    Bridgewater

    CANBERRA

    Hackett

    NORTHERN TERRITORY (REGIONAL)

    Alice Springs

    Braitling

    The Gap

    Sadadeen

    Desert Springs

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    It's an interesting article. I remember CBA putting out a similar report a few years back.

    Interesting to see that only one Canberra suburb made the cut – and it's not a cheap suburb to buy into.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Be interesting to see the whole equation. Does the debate consider all ongoing property costs such as rates, insurance, repairs, etc all of which are borne by the land owner?

    The other point seemingly overlooked is that interest rates are very low at the moment – what happens when rates increase by 0.5% – how many suburbs fall off the report on that basis?

    For some of those suburbs it could well be an 'at this point in time' argument.

    Profile photo of bardonbardon
    Participant
    @bardon
    Join Date: 2004
    Post Count: 557

    I have been following this as well and would say at the very least it is pointing to higher yielding suburbs, some under your nose I found.

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,680

    I also doubt the opportunity cost of owning is factored in either. 

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    very interesting, Rushcutters bay!

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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