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Cheaper to buy than rent in some capitals
Adelaide and Brisbane are the only capital cities where it is cheaper to buy than rent, but that difference is reducing across the country, according to recent data.
'Previously content tenants’ may be tempted into home ownership with interest rates decreasing, prices easing and affordability improving, said Mortgage Choice spokesperson Belinda Williamson.
“Recent Mortgage Choice research shows that, for houses in most capital cities, the weekly repayments on an average home loan could be less than or only slightly more than the median weekly asking rent,” said Ms Williamson.
Their research points to Adelaide and Brisbane as the capitals where it may currently be cheaper the buy, with weekly rents at $340 and $390, and weekly loan repayments at $330 and $375 respectively.
“Tenants who know their financial limitations and options are more likely to confidently leave the rental roundabout,” she said.
However, investors may not need to be too concerned as homeownership involves extra fees including land tax, strata fees, council rates, water consumption, insurances and maintenance that “need to be factored into the equation”.
Similarly, she said, “With changes to government incentives for first home buyers and weaker than expected consumer confidence around personal finances, it is not surprising that many renters have recently closed the door on the idea of homeownership.”
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