Renting is cheaper than buying property in the Australian suburbs

Many Australians can’t afford to purchase a home. However, a mortgage can be paid less than renting.

CoreLogic, a property research company has released new data showing that 33.9 percent Australian properties had property payments that were less than weekly rent repayments.

Calculations were made using an 80 percent loan-to-value ratio loan. They did not include the cost to save for a 20% deposit.

Despite this, Darwin was still the capital city, with 77% of properties having an approximate mortgage payment that is lower than rent.

Hobart came second with 59.7 per cent of properties that were less expensive than Brisbane (44.9%) or Perth (44.3%), and Adelaide (40.6%).

Only 9.6 percent of Melbourne’s homes have mortgage payments that are less than their rental income.

Sydney was the most difficult location to service your mortgage. Only 7.1% of all properties had mortgage payments that were lower than the average rent.

Parramatta and Auburn are most likely to offer bargains in Sydney. These areas have a high supply of homes, which has slowed down price growth. There is also a large population that rents.

At the suburb level, Regional Queensland had the highest number of first-home buyer’s homes.

The Gold Coast/Sunny Coast was particularly notable because it had low average incomes but high renters. This resulted in a shift in the monetary balance towards home-owners.

Logan Central was home 96.1 percent to the most affordable properties. Nambour was home to 84.5 percent the most affordable properties.

CoreLogic’s Head, Research Australia Eliza Owen believes there are hidden reasons why rental prices can rise above mortgage repayments.

“In some instances, relatively expensive rent payments can be a result of a highly transitory location – such as a mining location, university towns of city CBDs,” said Ms Owen.

Because some residents may prefer renting to owning, there is more pressure on rental markets.

“Residents become dependent on the rental marketplace because they have no other choice but to rent.”

Some areas, such as the highly competitive Sydney market, could feel additional pressure from the rental market because it is difficult to save for a deposit. This could result in an increase in rents.

According to data from Digital Finance Analytics (DFA), in January 2020, 32.8 percent of mortgage-holding Australians – representing more than 1.1 million borrowing households – and are now in mortgage stress.

Financial forecasts also predict that 83.400 households will default on their mortgages within the next 12 months.

DFA defines mortgage Stress as a household that must pay more than it earns each monthly, including mortgage repayments.

CAPITAL CITIES WHERE IT’S CHEAPER TO BUY THAN TO RENT*:

Rank:	City:	Renting is less expensive than buying a house at %	Median property value:
1	Darwin	77.6 Percent	$390,143
2	Hobart	59.7 Percent	$481,665
3	Brisbane	48.8 Percent	$499,691
4	Canberra	44.9 percent	$630,078
5	Perth	44.3 percent	$440,965
6	Adelaide	40.6 percent	$437,411
7	Melbourne	9.6 Percent	$681,925
8	Sydney	7.1%	$862,814

*CoreLogic data as of Jan 31 2020