Buying costs less than rent in just 48 suburbs
IT IS cheaper to buy a home than it is to rent in only 48 of Sydney's 967 suburbs.
In Melbourne, just six of 668 suburbs fit the bill. But in other parts of Australia the recent fall in interest rates and stable house prices have boosted the number of suburbs and country towns where it is now cheaper to buy than rent.
In October there were 388 localities, this month there were 494, according to RP Data's latest "Buy vs. Rent" report.
And if prospective home owners were willing to chip in another $50 per week, that number rose to 1726 localities, the report said.
A sharp rise in house prices over the past decade coupled with slower rental growth has resulted in far fewer suburbs in Australia's largest capital cities being cheaper to buy into than rent in, researcher Tim Lawless said.
"If you start factoring in your buying costs, stamp duty, conveyancing, pest and building inspections it starts to make the equation look much less appealing," he said.
The analysis compared a suburb's median weekly rent over the past year with the cost of monthly repayments on a variable 30-year mortgage where the loan-to-value ratio was 90 per cent and interest rate 5.65 per cent.
It did not factor in other costs associated with buying a property or take into consideration capital gains over time.
Brisbane had 58 suburbs where it was cheaper to buy than rent.
"Nationally, regional areas dominate the list with 310 suburbs outside of the capital cities showing better payments schedule for buying compared with renting," the report said. In the capital cities, the type of housing - apartments - made suburbs more affordable.
"That's a trend across most of the cities.
Typically units as opposed to detached houses are more aligned to paying off a mortgage, being cheaper than renting," Mr Lawless said.
The full list can be accessed at www.myrp.com.au/buyorrent.