Published on January 10th, 2013
Residential real estate ‘becoming cheaper to buy than rent’
The number of suburbs across Australia where it is cheaper to buy than rent residential real estate has risen to nearly 500, according to a new report.
RP Data's latest Buy vs Rent study has found there are 494 suburbs where paying a mortgage is the cheaper option – up by 106 from October's report.
Research director with RP Data Tim Lawless said if people were willing to spend $50 more on their mortgage as opposed to spending it on rent, the number of cheaper suburbs would jump to 1,620.
These figures are based on the scenario of repaying the principal plus interest on a variable rate.
The information suggests that apartment or complex-style dwellings more often offer mortgages as a cheaper option than renting – as opposed to detached housing.
Of the 494 locales, the majority (185) can be found in Queensland, with 58 located in the greater Brisbane region.
New South Wales has the second greatest number of suburbs on 122, while 48 can be found in Sydney.
Adelaide represents the highest concentration of real estate in a capital city that is cheaper to buy than rent, with 40 suburbs found in the capital, out of 58 for the entire of South Australia.
The boon for real estate in Adelaide continues as recent Housing Industry Association (HIA) data found that new home sales across South Australia jumped by 6.7 per cent in November.
The November rise of 6.7 per cent means that there was a 2.9 per cent rise in the three months to November from the previous quarter.
HIA regional director Robert Harding said this result was achieved through a number of factors.
He commented: "Against the backdrop of late 2012, when we had lower borrowing rates combining with a state incentive encouraging new home building through amendments particularly to first home buyer assistance, it is promising to see new home sales moving in the right direction."