Buying property is now cheaper than renting in these Australian suburbs
The report from A Game Property Advisory identifies 17 suburbs where beleaguered tenants could actually save money buying a property.
In the past year, average rental rates have risen by more than 10%, while vacancy rates throughout the country are at near historic lows.
It's a difficult time to be a tenant in Australia, and despite a 15% increase to Commonwealth rental assistance announced in last month's budget, there isn't much suggesting conditions will ease anytime soon.
PropTrack Senior Economist Eleanor Creagh believes this doesn't go far enough to protect the most vulnerable Australian renters.
"Although the increase to Commonwealth Rent Assistance is the largest in more than 30 years, rent assistance payments have long fallen behind soaring rental prices," she said.
"The share of affordable rentals is plummeting, meaning conditions remain challenging for low-income Australians."
Director of A Game Property Jim Malamatinas believes that there are many tenants for whom buying has become a cheaper alternative, particularly given the various government assistance schemes for first home buyers.
"I believe there’s a good opportunity over the next 6 months to purchase a property at a competitive price, with the help of various grants available, instead of continuing to rent and paying someone else’s mortgage," he said.
"Rental demand is at its all-time high, with the worst rental crisis in almost 20 years and tenants are relying on private landlords to help solve the problem as soon as possible but many can solve it for themselves by taking advantage of Government assistance and buying now."
The First Home Guarantee is a federal initiative where the government acts as a guarantor for up to 15% of a home loan.
This means that even if home buyers have a deposit as small as 5%, the Loan to Value ratio is lowered to 80%, which can mean the buyer will pay lower rates and avoid Lenders Mortgage Insurance (LMI).
The report found several suburbs surrounding Australia's largest capital cities where monthly mortgage repayments could be less than the equivalent rent.
Mortgage repayments were estimated based on a 20% deposit size (or buyers taking advantage of the first home guarantee), and compared to median rents.
Greater Sydney
| Suburb | Typical asking price | % rental increase in last 12 months |
| Paxton | $563,500 | 56.3% |
| Cliftleigh | $675,000 | 17.2% |
| Wallerawang | $515,000 | 7.8% |
Greater Melbourne
| Suburb | Typical asking price | % rental increase in last 12 months |
| Mitchell Park | $486,250 | 6.9% |
| Jackass Flat | $520,000 | 7.1% |
| Morwell | $340,000 | 15.7% |
Greater Brisbane
| Suburb | Typical asking price | % rental increase in last 12 months |
| Springfield Lakes | $650,000 | 20.0% |
| East Ipswich | $439,000 | 21.2% |
| Tivoli | $477,500 | 19.7% |
Greater Adelaide
| Suburb | Typical asking price | % rental increase in last 12 months |
| Blakeview | $457,000 | 10.5% |
| Craigmore | $426,450 | 16.7% |
| Gawler East | $485,000 | 9.1% |
Greater Perth
| Suburb | Typical asking price | % rental increase in last 12 months |
| Eglinton | $460,000 | 19.1% |
| Treeby | $593,500 | 7.4% |
| Leda | $386,000 | 13% |
ACT
| Suburb | Typical asking price | % rental increase in last 12 months |
| Belconnen | $630,000 | 5.0% |
| Isabella Plains | $777,500 | 8.1% |
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 5.95% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
