Top Australian suburbs where it is cheaper to buy than rent a home

Analysis reveals more than half of homes across the country cost less to purchase

Top Australian suburbs where it is cheaper to buy than rent a home

Despite house prices surging at a decade-high pace, it is still cheaper to buy than rent more than half the homes across Australia, a recent analysis by property website Realestate.com.au has shown.

The group conducted a 10-year analysis of all the expenses associated with buying and renting based on current house prices and a moderate price growth of 3% annually and found that 56.8% of all dwellings in the country would cost less to purchase than to rent.

The study also forecast that over the next decade, it would be less expensive to buy more than half, or 51.2%, of houses and about three-fourths, or 72.7%, of units nationwide compared to renting.

Paul Ryan, economist at Realestate.com.au, attributed the favourable buying conditions to the current historic-low interest rates.

“Interest rates can currently be fixed below 2% per year and the Reserve Bank of Australia has committed to maintaining low interest rates until at least 2024,” he wrote in the report. “This certainty that mortgage costs are not going to increase rapidly provides comfort to buyers borrowing larger amounts.”

According to the analysis, buying conditions were most favourable outside New South Wales and Victoria – the country’s most populous states. Figures showed that 81.2% of houses and 98.9% of units outside of these states cost less to buy than rent. These include dwellings located on the outskirts of capital cities Adelaide, Brisbane, Hobart, and Perth, and almost all of regional Australia.

“Affordability is driving demand and, as a result, it is likely we will continue to see regional price growth,” Ryan wrote.

However, the findings were also based on the assumption that buyers already have a 20% deposit, which Ryan admitted was the biggest barrier to homeownership, particularly for first home buyers.

“Many would-be buyers can already afford loan repayments, but struggle to save a deposit while renting,” he added. “Continued price growth may cause additional concern for many in this position.”

Top suburbs where it is cheaper to buy than rent

Here is a breakdown of the top suburbs where buying a home is less expensive than renting, according to Realestate.com.au’s inaugural Buy or Rent Report. The study compared the prices of a three-bedroom house and a two-bedroom unit across Australia’s capital cities.

Sydney

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Tacoma

$492,782

$435

$578

 

Rocky Point

$565,283

$450

$388

 

Warragamba

$532,205

$425

$366

 

Hamlyn Terrace

$589,461

$455

$338

 

Warnervale

$644,367

$395

$327

 

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Kangy Angy

$198,823

$340

$1,206

 

Stanhope Gardens

$336,432

$425

$1,148

 

Vineyard

$252,080

$355

$1,063

 

Warragamba

$277,249

$353

$973

 

Banksmeadow

$603,909

$580

$960

 

Source: REA Insights Buy or Rent Report, April 2021

Melbourne

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Waterford Park

$379,914

$330

$472

 

Rockbank

$476,683

$370

$311

 

Mickleham

$491,077

$380

$289

 

Millgrove

$457,213

$350

$278

 

Wollert

$511,142

$390

$266

 

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Frankston North

$419,269

$415

$794

 

Bangholme

$375,489

$368

$682

 

Williams Landing

$388,875

$370

$658

 

Woori Yallock

$363,027

$350

$622

 

Burnside Heights

$394,018

$363

$563

 

Source: REA Insights Buy or Rent Report, April 2021

Brisbane

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Kilcoy

$299,474

$360

$1,014

 

Lockrose

$267,298

$335

$977

 

Waterford

$359,110

$375

$890

 

Toogoolawah

$256,158

$310

$872

 

Logan Reserve

$372,367

$385

$870

 

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Brisbane City

$508,928

$525

$1,162

 

Woolloongabba

$428,708

$470

$1,156

 

Kangaroo Point

$489,224

$505

$1,125

 

Eight Mile Plains

$372,538

$430

$1,122

 

Dutton Park

$433,155

$470

$1,119

 

Source: REA Insights Buy or Rent Report, April 2021

Adelaide

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Elizabeth South

$168,814

$245

$772

 

Gawler West

$235,200

$290

$753

 

Munno Para

$263,004

$310

$748

 

Elizabeth Park

$223,111

$280

$736

 

Wingfield

$302,639

$335

$730

 

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Glanville

$242,210

$340

$994

 

Walkerville

$368,493

$420

$967

 

Sturt

$226,139

$318

$946

 

Happy Valley

$209,559

$298

$512

 

Adelaide

$419,024

$445

$908

 

Source: REA Insights Buy or Rent Report, April 2021

Perth

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Hilbert

$287,256

$330

$811

 

Meadow Springs

$360,369

$370

$730

 

Lakelands

$324,126

$340

$714

 

Carramar

$449,931

$420

$693

 

Stratton

$293,819

$315

$689

 

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Wanneroo

$175,417

$355

$1,363

 

Merriwa

$219,695

$340

$1,135

 

Coodanup

$123,255

$275

$1,110

 

Wattleup

$260,214

$365

$1,084

 

Swanbourne

$736,240

$690

$1,060

 

Source: REA Insights Buy or Rent Report, April 2021

Hobart

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Clarendon Vale

$285,250

$365

$993

 

Gagebrook

$265,480

$340

$930

 

Risdon Vale

$347,229

$385

$874

 

Herdsmans Cove

$283,349

$340

$853

 

Chigwell

$376,246

$400

$842

 

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Glebe

$367,388

$495

$1,413

 

Herdsmans Cove

$225,979

$325

$1,000

 

Mornington

$356,149

$405

$947

 

Bridgewater

$236,351

$315

$906

 

Rokeby

$357,914

$395

$891

 

Source: REA Insights Buy or Rent Report, April 2021

Darwin

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Zuccoli

$426,905

$550

$1,449

 

Muirhead

$498,843

$580

$1,315

 

The Narrows

$412,274

$515

$1,295

 

Woolner

$589,819

$603

$1,069

 

Lyons

$628,005

$605

$924

 

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Darwin City

$363,492

$485

$1,336

 

Anula

$196,684

$340

$1,204

 

Rosebery

$260,038

$380

$1,154

 

Wagaman

$166,040

$310

$1,151

 

Malak

$194,535

$330

$1,148

 

Source: REA Insights Buy or Rent Report, April 2021

Canberra

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

 

Coombs

$591,756

$565

$1,001

 

Denman Prospect

$588,355

$555

$984

 

Moncrieff

$598,754

$535

$833

 

Casey

$607,581

$525

$738

 

Throsby

$692,715

$580

$696

 

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

 

City

$601,111

$685

$1,634

 

Reid

$441,282

$540

$1,437

 

Turner

$531,500

$585

$1,346

 

Dickson

$501,017

$560

$1,323

 

Crace

$368,164

$460

$1,291

 

Source: REA Insights Buy or Rent Report, April 2021

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