The number of suburbes where it's cheaper to buy is on the rise - but they're not likely to be in Sydney or Melbourne. Photo: Louie Douvis
Only a handful of suburbs in Melbourne and fewer than 50 in Sydney are cheaper for aspiring owners to buy a home in than to rent.
In Melbourne, only six suburbs were more affordable to buy than rent and in Sydney, only 48 fit the bill.
But in other parts of the country the recent fall in interest rates and stable house prices has boosted the number of suburbs and country towns where it is 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 in than rent, researcher Tim Lawless said.
‘‘If you start factoring in your buying costs, stamp duty, convencing, 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 here. (RP Data will ask you for your email address.)