The suburbs where it is cheaper to buy than rent for both homes and units have been revealed.
More than half of properties across Australia are now more affordable to purchase than lease out, new analysis by realestate.com.au shows, as interest rates remain at record lows.
Economists crunched the numbers to determine 56.8 per cent of dwellings are cheaper to buy, taking into account current property prices and a decade-long analysis of finances associated with renting and buying.
Realestate.com.au economist Paul Ryan said interest rates at the moment can be fixed at less than two per cent a year, making buying a house a much more attractive option.
New analysis shows that in Brisbane City (pictured) buyers of two bedroom units are $1162 a month better off compared renters, based on a 10-year cost analysis
In Greater Melbourne, Frankston North is the top suburb where it is cheaper to buy than rent, to the tune of $794 a month
‘This certainty that mortgage costs are not going to increase rapidly provides comfort to buyers borrowing larger amounts,’ Mr Ryan said.
Across Australia’s capital cities, house prices are surging at a double digit annual rate as apartment values fall in the same markets.
In Sydney house prices have surged by $100,000 in just three months.
Some economists have forecast property prices will surge by as much as 20 per cent over the next year.
‘Part of the reason why prices are forecast to rise so strongly is because people can recognise that generally property is so much cheaper to buy than rent currently,’ Mr Ryan said.
Across Australia, the outer suburbs of Brisbane, Adelaide, Perth and Hobart are the cheapest to buy at the moment, along with regional areas.
In Wanneroo (pictured), Perth’s north, buyers are $1363 better off a month compared to renters for two bedroom units
In Adelaide, Elizabeth South is $772 a month cheaper to buy than rent for three bedroom homes
CHEAPER TO BUY THAN RENT
Greater capital city
Three bedroom houses
Two bedroom units
In the Greater Sydney region, Tacoma, on the Central Coast, tops the list of three bedroom homes that are cheaper to buy than rent, with the 10-year analysis showing a monthly price difference of $578.
Nearby Kangy Angy is the place where it is cheaper to buy than rent for two bedroom units in the Greater Sydney region, with homeowners $1206 better off than renters.
In Greater Melbourne, Watford Park is the number one suburb where buyers are better off than renters for three bedroom homes, to the tune of $472 a month, while for two bedroom units Frankston North comes out on top.
In Greater Brisbane, homeowners are most better off in Kilcoy, where buying is $1014 a month cheaper for three bedroom homes, and for two bedroom units, buyers in Brisbane City are $1162 better off than renters.
In Perth, Hilbert is the top suburb for buyers over rents, at a cost benefit of $811 a month for three bedroom and for two bedroom units, Wanneroo is the place to go as buyers are $1363 better off a month compared to renters.
Sydney’s median house price surged to a new record high of $1.309million in the March quarter as values soared $103,000 or by 8.5 per cent in just three months. Pictured is a Baulkham Hills house with a price guide of $1.6million
TOP 10 SUBURBS IN EACH CAPITAL CITY WHERE IT IS CHEAPER TO BUY
Greater Capital City
Three bedroom homes
Two bedroom units
Eight Mile Plains
In Adelaide, Elizabeth South is $772 a month cheaper to buy than rent for three bedroom homes and Glanville is $994 a month cheaper to buy than rent for two bedroom units.
Victorian-based buyer’s agent and Real Estate Buyers Agents Association of Australia president Cate Bakos said regional areas were also proving attractive for those wanting to switch from renting to buying.
‘For a lot of tenants, they’re saying “why would I rent when – provided I can save a big enough deposit or get some help with some of the incentives on offer – I could have a mortgage that’s cheaper than my rent”,’ she said.