CHEAPER TO BUY THAN TO RENT IN 388 SUBURBS
The lovely “The Age” newspaper tells us
Falling property prices and interest rate cuts have made it cheaper to buy rather than rent in 388 suburbs and towns around the country, a new report finds.
And if buyers are willing and able to spend an extra $50 a week in mortgage repayments over rent, the number of suburbs where purchasing becomes a viable option rises to 1419, according to RP Data’s latest Buy vs. Rent report.
National research director Tim Lawless said the combination of steep price falls and significantly lower interest rates was creating new opportunities for renters keen to buy a property.
“For many buyers now may be a good time to either re-enter the market or buy their first home,” he said.
In the group’s last report in August, it was more affordable to buy rather than rent in only 238 suburbs.
RP Data’s survey compared median asking rents against mortgage repayments based on a 5.9 per cent lending rate. It did not include additional buying or holding expenses such as council rates, land tax, stamp duty, owners corporation fees or maintenance costs.
The report has been criticised by industry operators who say the “theoretical” calculations bear little relationship to experiences at the coalface.
Buyer’s advocate Catherine Cashmore cites the findings for the inner Melbourne suburb of Abbotsford, where the median value is said to be $360,868 for units and the rent is $475 per week.
“Anyone who knows the area knows that price would only buy a one-bedroom unit, while that kind of rent would get a small, two-bedroom house.”
RP Data said there are 5386 suburbs across Australia, with the affordable buy v rent suburbs accounting for only 7.2 per cent of the total.
Despite a recent rally in some capital cities, home values are still down 6 per cent nationally from their 2010 peak.
