Buying cheaper than renting: RP Data

Staff Reporter

There are now 494 suburbs across Australia’s capital cities and regions where it’s cheaper to service a mortgage than pay a landlord, according to new research by RP Data.

In the latest Buy Vs Rent Report, RP Data found Queensland boasts the greatest number of suburbs and towns - at 185 - where it’s cheaper to take out a mortgage than a rental lease.

Greater Brisbane accounts for 58 suburbs, while the remaining 127 can be found in the regional areas of the state.

New South Wales has 122 suburbs, with 48 located in Sydney.

Victoria increased its tally from 17 suburbs in October to 28 areas where again, using a variable interest rate mortgage structure, it is cheaper to service a mortgage for a property than pay rent.

A strong run on capital gains and flat rental market conditions across Melbourne has meant that, with just six suburbs, Melbourne holds the lowest number of suburbs across the state capitals where taking out a mortgage is cheaper than renting.

Currently one of Australia’s most affordable states, South Australia has 58 areas where mortgage repayments are currently cheaper than renting; an impressive 40 suburbs are in Adelaide, while the remaining 18 are located across the state.

In Tasmania, there are 34 areas: 16 are within Greater Hobart while the remainder are in the regional areas. The ACT recorded just one suburb, located in Canberra.

Western Australia has 48 places where mortgage repayments are lower than rental costs; eight of these are in Perth with the remainder mostly located in the state’s resource-driven areas.

Finally, the Northern Territory is now showing 18 suburbs; seven are in Darwin (up from two in the November report) while the remaining 11 are in the regional areas.

According to RP Data's national research director Tim Lawless, the Australian housing market experienced one of its toughest years ever during 2011 and throughout much of 2012.

“Capital city home values fell by 3.8 per cent throughout 2011 and have followed it up with a further 0.1 per cent fall over the first 11 months of 2012,” he said.

“If the weakness persists throughout December, it will be the first time in a long time that capital city home values have fallen over successive years indicating very different market conditions to those which most home owners have become accustomed to.

"With capital city dwelling values 5.5 per cent lower than when they peaked, and discounted variable mortgage rates 150 basis points below their 2011 peak, coupled with fixed mortgage rates 225 basis points lower, we may see consumers returning to the property market as they realise that residential property may not cost them that much more to own than rent.

“In some suburbs it may actually be cheaper than renting especially where we are seeing evidence of tight rental markets resulting in rental increases and lower home values. For many buyers, now may be a good time to either re-enter the market or buy their first home.”

Staff Reporter

There are now 494 suburbs across Australia’s capital cities and regions where it’s cheaper to service a mortgage than pay a landlord, according to new research by RP Data.

In the latest Buy Vs Rent Report, RP Data found Queensland boasts the greatest number of suburbs and towns - at 185 - where it’s cheaper to take out a mortgage than a rental lease.

Greater Brisbane accounts for 58 suburbs, while the remaining 127 can be found in the regional areas of the state.

New South Wales has 122 suburbs, with 48 located in Sydney.

Victoria increased its tally from 17 suburbs in October to 28 areas where again, using a variable interest rate mortgage structure, it is cheaper to service a mortgage for a property than pay rent.

A strong run on capital gains and flat rental market conditions across Melbourne has meant that, with just six suburbs, Melbourne holds the lowest number of suburbs across the state capitals where taking out a mortgage is cheaper than renting.

Currently one of Australia’s most affordable states, South Australia has 58 areas where mortgage repayments are currently cheaper than renting; an impressive 40 suburbs are in Adelaide, while the remaining 18 are located across the state.

In Tasmania, there are 34 areas: 16 are within Greater Hobart while the remainder are in the regional areas. The ACT recorded just one suburb, located in Canberra.

Western Australia has 48 places where mortgage repayments are lower than rental costs; eight of these are in Perth with the remainder mostly located in the state’s resource-driven areas.

Finally, the Northern Territory is now showing 18 suburbs; seven are in Darwin (up from two in the November report) while the remaining 11 are in the regional areas.

According to RP Data's national research director Tim Lawless, the Australian housing market experienced one of its toughest years ever during 2011 and throughout much of 2012.

“Capital city home values fell by 3.8 per cent throughout 2011 and have followed it up with a further 0.1 per cent fall over the first 11 months of 2012,” he said.

“If the weakness persists throughout December, it will be the first time in a long time that capital city home values have fallen over successive years indicating very different market conditions to those which most home owners have become accustomed to.

"With capital city dwelling values 5.5 per cent lower than when they peaked, and discounted variable mortgage rates 150 basis points below their 2011 peak, coupled with fixed mortgage rates 225 basis points lower, we may see consumers returning to the property market as they realise that residential property may not cost them that much more to own than rent.

“In some suburbs it may actually be cheaper than renting especially where we are seeing evidence of tight rental markets resulting in rental increases and lower home values. For many buyers, now may be a good time to either re-enter the market or buy their first home.”

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