Five suburbs where a mortgage is cheaper than paying rent


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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:

suburbs mortgages cheaper than rent

  • 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.

The situation is set to get better for Hobart, where rents lifted 5.8% in the year to January compared to 5% growth in property values.

Meanwhile, the number of auctions across the combined capital cities is growing, projected to be up 12.7% this week. Melbourne and Sydney should see the most - no surprises there - with 1464 and 1051 homes set to go under the hammer respectively.

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David Thornton was a journalist at Money from September 2019 to November 2021. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
Vince Kuenen
March 12, 2020 4.15am

Hard to believe the numbers for cheaper to buy than rent, have all the costs for owning been included in addition to the mortgage there are rates and taxes, insurance and maintenance which are covered by the landlord?

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