Five suburbs where a mortgage is cheaper than paying rent
Home ownership is all but a pipe dream for many Australians as they're kept out of the market by soaring property prices.
While this narrative holds true for major metropolitan areas, home ownership remains a reality in other parts of the country.
New research from CoreLogic shows more than a third of properties across Australia have estimated mortgage repayments less than rental repayments. Five of these suburbs are:
- Leda, Western Australia (where 98.9% of individual properties are cheaper to buy than rent)
- Logan Central, Queensland (96.1%)
- Hackham, South Australia (93.9%)
- Lismore, New South Wales (88.9%)
- Glenorchy, Tasmania (85.5%)
The researcher says from a regional perspective, the Gold Coast and Sunshine Coast are standouts, boasting 20% of the properties where it's cheaper to buy than rent.
Among the capital cities, Darwin leads the pack with 77.6% of properties exhibiting lower estimated mortgage repayments than rent. At the other end of the spectrum, only 7.1% of Sydney properties are cheaper to own.
CoreLogic puts the varied results down to differing property value sensitivity to interest rate cuts.
"The more property values increase in response to lower mortgage rates, the more the benefits of a low interest rate are eroded. In Sydney, a relatively high supply of rental stock has exacerbated the gap between mortgage repayments and rents," says Eliza Owen, head of research at CoreLogic.
After the June 2019 rate cuts, Sydney property values skyrocketed 11.2% over the following six months, while Darwin's saw a drop of 2.4% through the same period.
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