Third Of Australian Homes Cheaper To Buy Than Rent
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Third Of Australian Homes Cheaper To Buy Than Rent

Low interest rates and ascendant regional rent prices have seen mortgages look attractive.

By Kanebridge News
Thu, Jul 15, 2021 10:18amGrey Clock < 1 min

Outside Australia’s two most populous major capital cities – Sydney and Melbourne – the incentive to buy a home has never been higher with homes across the rest of the country generally cheaper to buy than rent.

Only 4.9% of homes in Sydney and 7.3% of homes in Melbourne were cheaper to buy than rent, according to a new report by Corelogic.

Elsewhere, between 43% to 96% of other Australian addresses are cheaper to service a mortgage when compared to renting, including Brisbane.

The report showed buying cost less than renting at 36.2% of properties across the country, up from 33.9% last year.

Further, the demand for new homes increased by 15.3% driven by owner-occupiers while rent went up where domestic migration was strong.

Proportion of homes cheaper to buy than rent

Capital Percentage cheaper to buy Regional homes Percentage cheaper to buy
Darwin 86.5% NT 96.4%
Perth 59.6% WA 79.4%
Brisbane 55.3% Qld 73.1%
Hobart 50.2% Tas 71.4%
Adelaide 47.4% SA 47.4%
ACT 43.6
Melbourne 7.3% Vic 43.6%
Sydney 4.9% NSW 48.2%
Combined 26.2% Combined 60.1%

^Source: Corelogic Property Pulse

“The combination of lower rent growth and very strong dwelling value growth has meant that even fewer properties across Sydney are cheaper to pay down a mortgage than rent, at just 4.9 per cent,” said Corelogic head of research Eliza Owen.

“This is down from 7.1 per cent when the analysis was done with the same assumptions in February 2020.”

Owen added results were also indicative of lower interest costs on mortgage debt since the onset of Covid-19.

“However, reduced interest costs have not led to cheaper mortgage serviceability relative to rents in every instance,” Owen said.



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The first quarter of the year brought some long-awaited signs of recovery in London’s luxury housing market, offering the first positive quarterly price growth since September 2022, according to a report from Savills on Wednesday.

After six consecutive quarterly price falls, luxury home prices in central London levelled out in the first three months of the year, with a 0.1% quarterly uptick in prices. The £3 million to £5 million (US$3.79 million to US$6.32 million) market saw a slightly larger increase of 0.3%.

Outer London’s luxury market saw greater quarterly price growth, with home prices up 0.8%, as some stability returned to mortgage costs and lured more buyers back to the market, according to the report.

All of this is evidence that the market is “in early stages of recovery,” according to Lucian Cook, head of residential research at Savills.

“The outlook for the housing market has certainly improved, partly because the mortgage market has recovered more quickly than expected,” Cook said in the report. “With the first rate cut rapidly coming into view and recessionary risks easing, greater stability has returned to the cost of mortgage debt, which has positively impacted domestic prime markets, where many buyers rely on borrowing, most notably in leafy outer prime South and West London, as well as the commuter belt.”

Outside of London, prices across the U.K. saw no quarterly growth heading into the beginning of the spring market, which is expected to bring higher levels of buyer activity in many regions.

Suburban regions saw prices dip just 0.1%, while urban areas—like Edinburgh and Glasgow in Scotland, and Bath and Oxford in England—saw prices increase by 0.6%.

Cook said regional buyers are more likely to be concerned about market uncertainty than London buyers in the lead up to the general election.

“As a result, buyers are still expected to be less committed until the dust has settled,” he said.

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This stylish family home combines a classic palette and finishes with a flexible floorplan

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