Analysis reveals more than half of homes across the country cost less to purchase
Despite house prices surging at a decade-high pace, it is still cheaper to buy than rent more than half the homes across Australia, a recent analysis by property website Realestate.com.au has shown.
The group conducted a 10-year analysis of all the expenses associated with buying and renting based on current house prices and a moderate price growth of 3% annually and found that 56.8% of all dwellings in the country would cost less to purchase than to rent.
The study also forecast that over the next decade, it would be less expensive to buy more than half, or 51.2%, of houses and about three-fourths, or 72.7%, of units nationwide compared to renting.
Paul Ryan, economist at Realestate.com.au, attributed the favourable buying conditions to the current historic-low interest rates.
“Interest rates can currently be fixed below 2% per year and the Reserve Bank of Australia has committed to maintaining low interest rates until at least 2024,” he wrote in the report. “This certainty that mortgage costs are not going to increase rapidly provides comfort to buyers borrowing larger amounts.”
According to the analysis, buying conditions were most favourable outside New South Wales and Victoria – the country’s most populous states. Figures showed that 81.2% of houses and 98.9% of units outside of these states cost less to buy than rent. These include dwellings located on the outskirts of capital cities Adelaide, Brisbane, Hobart, and Perth, and almost all of regional Australia.
“Affordability is driving demand and, as a result, it is likely we will continue to see regional price growth,” Ryan wrote.
However, the findings were also based on the assumption that buyers already have a 20% deposit, which Ryan admitted was the biggest barrier to homeownership, particularly for first home buyers.
“Many would-be buyers can already afford loan repayments, but struggle to save a deposit while renting,” he added. “Continued price growth may cause additional concern for many in this position.”
Top suburbs where it is cheaper to buy than rent
Here is a breakdown of the top suburbs where buying a home is less expensive than renting, according to Realestate.com.au’s inaugural Buy or Rent Report. The study compared the prices of a three-bedroom house and a two-bedroom unit across Australia’s capital cities.
Sydney
|
3-bedroom house |
||||
|---|---|---|---|---|
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Tacoma |
$492,782 |
$435 |
$578 |
|
|
Rocky Point |
$565,283 |
$450 |
$388 |
|
|
Warragamba |
$532,205 |
$425 |
$366 |
|
|
Hamlyn Terrace |
$589,461 |
$455 |
$338 |
|
|
Warnervale |
$644,367 |
$395 |
$327 |
|
|
2-bedroom unit |
||||
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Kangy Angy |
$198,823 |
$340 |
$1,206 |
|
|
Stanhope Gardens |
$336,432 |
$425 |
$1,148 |
|
|
Vineyard |
$252,080 |
$355 |
$1,063 |
|
|
Warragamba |
$277,249 |
$353 |
$973 |
|
|
Banksmeadow |
$603,909 |
$580 |
$960 |
|
Source: REA Insights Buy or Rent Report, April 2021
Melbourne
|
3-bedroom house |
||||
|---|---|---|---|---|
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Waterford Park |
$379,914 |
$330 |
$472 |
|
|
Rockbank |
$476,683 |
$370 |
$311 |
|
|
Mickleham |
$491,077 |
$380 |
$289 |
|
|
Millgrove |
$457,213 |
$350 |
$278 |
|
|
Wollert |
$511,142 |
$390 |
$266 |
|
|
2-bedroom unit |
||||
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Frankston North |
$419,269 |
$415 |
$794 |
|
|
Bangholme |
$375,489 |
$368 |
$682 |
|
|
Williams Landing |
$388,875 |
$370 |
$658 |
|
|
Woori Yallock |
$363,027 |
$350 |
$622 |
|
|
Burnside Heights |
$394,018 |
$363 |
$563 |
|
Source: REA Insights Buy or Rent Report, April 2021
Brisbane
|
3-bedroom house |
||||
|---|---|---|---|---|
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Kilcoy |
$299,474 |
$360 |
$1,014 |
|
|
Lockrose |
$267,298 |
$335 |
$977 |
|
|
Waterford |
$359,110 |
$375 |
$890 |
|
|
Toogoolawah |
$256,158 |
$310 |
$872 |
|
|
Logan Reserve |
$372,367 |
$385 |
$870 |
|
|
2-bedroom unit |
||||
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Brisbane City |
$508,928 |
$525 |
$1,162 |
|
|
Woolloongabba |
$428,708 |
$470 |
$1,156 |
|
|
Kangaroo Point |
$489,224 |
$505 |
$1,125 |
|
|
Eight Mile Plains |
$372,538 |
$430 |
$1,122 |
|
|
Dutton Park |
$433,155 |
$470 |
$1,119 |
|
Source: REA Insights Buy or Rent Report, April 2021
Adelaide
|
3-bedroom house |
||||
|---|---|---|---|---|
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Elizabeth South |
$168,814 |
$245 |
$772 |
|
|
Gawler West |
$235,200 |
$290 |
$753 |
|
|
Munno Para |
$263,004 |
$310 |
$748 |
|
|
Elizabeth Park |
$223,111 |
$280 |
$736 |
|
|
Wingfield |
$302,639 |
$335 |
$730 |
|
|
2-bedroom unit |
||||
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Glanville |
$242,210 |
$340 |
$994 |
|
|
Walkerville |
$368,493 |
$420 |
$967 |
|
|
Sturt |
$226,139 |
$318 |
$946 |
|
|
Happy Valley |
$209,559 |
$298 |
$512 |
|
|
Adelaide |
$419,024 |
$445 |
$908 |
|
Source: REA Insights Buy or Rent Report, April 2021
Perth
|
3-bedroom house |
||||
|---|---|---|---|---|
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Hilbert |
$287,256 |
$330 |
$811 |
|
|
Meadow Springs |
$360,369 |
$370 |
$730 |
|
|
Lakelands |
$324,126 |
$340 |
$714 |
|
|
Carramar |
$449,931 |
$420 |
$693 |
|
|
Stratton |
$293,819 |
$315 |
$689 |
|
|
2-bedroom unit |
||||
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Wanneroo |
$175,417 |
$355 |
$1,363 |
|
|
Merriwa |
$219,695 |
$340 |
$1,135 |
|
|
Coodanup |
$123,255 |
$275 |
$1,110 |
|
|
Wattleup |
$260,214 |
$365 |
$1,084 |
|
|
Swanbourne |
$736,240 |
$690 |
$1,060 |
|
Source: REA Insights Buy or Rent Report, April 2021
Hobart
|
3-bedroom house |
||||
|---|---|---|---|---|
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Clarendon Vale |
$285,250 |
$365 |
$993 |
|
|
Gagebrook |
$265,480 |
$340 |
$930 |
|
|
Risdon Vale |
$347,229 |
$385 |
$874 |
|
|
Herdsmans Cove |
$283,349 |
$340 |
$853 |
|
|
Chigwell |
$376,246 |
$400 |
$842 |
|
|
2-bedroom unit |
||||
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Glebe |
$367,388 |
$495 |
$1,413 |
|
|
Herdsmans Cove |
$225,979 |
$325 |
$1,000 |
|
|
Mornington |
$356,149 |
$405 |
$947 |
|
|
Bridgewater |
$236,351 |
$315 |
$906 |
|
|
Rokeby |
$357,914 |
$395 |
$891 |
|
Source: REA Insights Buy or Rent Report, April 2021
Darwin
|
3-bedroom house |
||||
|---|---|---|---|---|
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Zuccoli |
$426,905 |
$550 |
$1,449 |
|
|
Muirhead |
$498,843 |
$580 |
$1,315 |
|
|
The Narrows |
$412,274 |
$515 |
$1,295 |
|
|
Woolner |
$589,819 |
$603 |
$1,069 |
|
|
Lyons |
$628,005 |
$605 |
$924 |
|
|
2-bedroom unit |
||||
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Darwin City |
$363,492 |
$485 |
$1,336 |
|
|
Anula |
$196,684 |
$340 |
$1,204 |
|
|
Rosebery |
$260,038 |
$380 |
$1,154 |
|
|
Wagaman |
$166,040 |
$310 |
$1,151 |
|
|
Malak |
$194,535 |
$330 |
$1,148 |
|
Source: REA Insights Buy or Rent Report, April 2021
Canberra
|
3-bedroom house |
||||
|---|---|---|---|---|
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
Coombs |
$591,756 |
$565 |
$1,001 |
|
|
Denman Prospect |
$588,355 |
$555 |
$984 |
|
|
Moncrieff |
$598,754 |
$535 |
$833 |
|
|
Casey |
$607,581 |
$525 |
$738 |
|
|
Throsby |
$692,715 |
$580 |
$696 |
|
|
2-bedroom unit |
||||
|
Suburb |
AVM median price |
AVM median rental |
Monthly price differential |
|
|
City |
$601,111 |
$685 |
$1,634 |
|
|
Reid |
$441,282 |
$540 |
$1,437 |
|
|
Turner |
$531,500 |
$585 |
$1,346 |
|
|
Dickson |
$501,017 |
$560 |
$1,323 |
|
|
Crace |
$368,164 |
$460 |
$1,291 |
|
Source: REA Insights Buy or Rent Report, April 2021
