PROPERTY

10 Aussie suburbs where it's cheaper to buy than rent

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To rent or to buy, that is the question.

With mortgage rates at record lows, loan serviceability costs have become cheaper overall. Yet housing affordability continues to plague a generation of would-be first-time buyers, especially in inner-city suburbs where the median property price can easily surpass $1 million.

While buyer demand tends to remain strong as Aussies prize real estate as an investment, rental demand can vary. This can have a major impact on whether it's cheaper to pay down a mortgage or outsource those homeowning issues and rent.

suburbs where its cheaper to buy than rent
Tuross Head, Victoria, is one Australian suburb where it's cheaper to buy than rent.

The pandemic brought about some significant changes to the rental market. Vacancy rates soared in major capital cities as international students returned home and city-dwellers flocked to regional and coastal towns, spurred on by the ability to work or study remotely. In certain regional locations, increased demand has led to an increase in rental prices, while those in the inner city have been falling.

A Finder analysis of CoreLogic data from January 2021 took a deep dive into the issue, revealing the top locations around the country where a mortgage is cheaper than paying rent. The report analysed the monthly cost of mortgage repayments for the median Australian property compared to the median monthly rent for each suburb.

Interestingly, all the towns that made the top 10 list are coastal, where the regional migration may have contributed to high rental prices. With international travel off the cards, property investors have been cashing in on the influx of Aussies spending their holidays at regional or coastal towns instead.

So if you're sussing out a solid investment option, considering a sea change, or you're still deciding on whether to apply for a home loan, below are the top 10 suburbs across Australia where homeownership is cheaper than renting.

1. Point Lookout, Queensland

This small coastal suburb on Stradbroke Island boasts the biggest price difference between mortgage and rental payments - likely because most of the rental options are high-ent holiday homes. Located about two hours north of the Brisbane CBD, the area is best known for its sweeping beaches and whale watching vantage points.

Here, the median monthly mortgage repayment costs $3092, while a month's rent will set you back $8233. This means homeowners are, in theory, paying $5146 less per month than renters on average - that's an incredible $61,752 difference per year.

2. Point Lonsdale, Victoria

In second place is the seaside suburb of Port Lonsdale, located near Queenscliff, Victoria. Home to beaches, bays and a lighthouse, the area is popular with surfers and fishermen.

Homeowners here fork out $3120 on average for monthly mortgage repayments. This increases to $8017 per month for renters. This means renters pay approximately $4897 extra each month - or $58,764 per year.

3. Indented Head, Victoria

This small coastal township on the Bellarine Peninsula is loved by locals for its quiet and relatively isolated location. The population tends to swell dramatically during the summer months, with fisherman, boaters and families making the most of the water.

Here, the median monthly mortgage repayment is around $1912, and renters are charged around $6175 per month, approximately $4263 more than homeowners - again likely driven by tourist rentals.

4. Manyana, New South Wales

Located in the Shoalhaven region on the South Coast, Manyana has a small population and is the ultimate destination for anyone wanting a traditional beach holiday. The area is home to some great surfing and swimming spots, along with a number of walking tracks.

If you want to rent here, you can expect to pay your landlord around $6067 each month. On the other hand, a mortgage for a median property will set you back just $1876 per month in comparison. That's an eye watering difference of $4191 per month.

5. Bicheno, Tasmania

Bicheno is located on the east coast of Tasmania. The seaside town is a long-standing favourite among families and those seeking a sea change. The white sandy beaches, local penguins and bushwalks make it a popular holiday spot during the warmer months as well.

The median mortgage payments on a home here will cost you $1693 per month, whereas renters will need to fork out $5460 per month. That's a difference of $3767!

Other towns that ranked in the top 10

6. Carrickalinga, South Australia

Median monthly mortgage repayment: $1632

Median monthly rent: $4333

Difference: $2701

7. Bawley Point, New South Wales

Median monthly mortgage repayment: $2882

Median monthly rent: $4767

Difference: $1885

8. Tuross Head, New South Wales

Median monthly mortgage repayment: $1857

Median monthly rent: $3683

Difference: $1826

9. Normanville, South Australia

Median monthly mortgage repayment: $1363

Median monthly rent: $3033

Difference: $1670

10. Malua Bay, New South Wales

Median monthly mortgage repayment: $2251

Median monthly rent: $3900

Difference: $1649

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Graham Cooke is the head of consumer research at Finder.
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