Invest
Revisiting the rent v buy property conundrum
A growing number of regions are reporting rental prices that are on par with mortgage repayments, reigniting the age-old question of whether Australians are better off renting or buying.
Revisiting the rent v buy property conundrum
A growing number of regions are reporting rental prices that are on par with mortgage repayments, reigniting the age-old question of whether Australians are better off renting or buying.
The new housing affordability report from ANZ and CoreLogic has examined the costs of housing as a proportion of average incomes.
Here’s a breakdown of what it found:
Servicing new mortgages
According to the report, repayments on a new mortgage on a regional dwelling currently require 30.6 per cent of gross household income.
For detached houses, this breaks down to 31.4 per cent, while for units, this sits at 27.5 per cent.
It’s down from the peak across both houses and units of 53.1 per cent gross household income, as recorded in March 2008.
The report went on to indicate that the proportion of income required by regional households to service a new mortgage has been held below one-third since June 2013.
Share of income required for rent
“The proportion of income required to pay the rent is roughly equivalent compared with the proportion of income required to service a mortgage across regional Australia,” the report read.
On average, renters are dedicating 30.3 per cent of their salary to accommodation costs, which is only slightly below the 30.6 per cent recorded for mortgage payers.
ANZ and CoreLogic have noted that rental costs have been trending upwards since late 2016, “reflecting an 8.6 per cent rise in rents between the end of 2016 and June 2019, while household incomes were up a lower 5.3 per cent”.
To rent a house, costs as a percentage of income are sitting at 30.6 per cent, while the proportion being spent on servicing a unit rental agreement is now sitting at 29 per cent.
The findings led to CoreLogic’s head of research, Tim Lawless, highlighting an increase in the number of locations where it is cheaper to buy than rent.
Almost 80 regions Australia-wide have been flagged by ANZ and CoreLogic as locations where this is the case.
Such locations include the ACT’s Molonglo, Greater Brisbane’s Ipswich Hinterland and Ipswich Inner, NSW’s Broken Hill, Snowy Mountains and Dubbo, Greater Perth’s Kwinana and Armadale, Greater Hobart’s Brighton, and Darwin city and suburbs.
Mr Lawless said this can be attributed to “the lowest interest rates since the 1950s, together with lower housing prices relative to the market peak.”
nestegg previously reported that housing affordability has now peaked as housing prices rebound.
About the author
About the author
Property
Are we nearing another property boom?
There’s a secret to knowing when the property cycle will take its next turn, and it's not as far away as some may think, according to a property expert. ...Read more
Property
Hot Property: Biggest headlines this week
Based off anecdotal accounts, the property industry is gearing up for a strong spring season: Here are the biggest property stories from this week. ...Read more
Property
Ace a rental application in 5 simple steps
In many areas across Australia, the rental market is becoming increasingly competitive, so how do you ensure your application will stand out? ...Read more
Property
Population falls could see Australia with 232,000 vacant dwellings
The shutdown of international borders could cut demand for Australian housing by as much as 232,000 dwellings over the next three years, according to research. ...Read more
Property
How will border closures impact the property market?
Despite falling migration levels, property prices might not be impacted as much as investors think, an industry expert has explained. ...Read more
Property
Sydney, Brisbane, Melbourne tipped to surge: Westpac
One of Australia’s largest banks is forecasting strong growth in the housing market as low interest rates and availability of credit pushes prices up, despite the country being in its first recessio...Read more
Property
Is now the right time to make a tree or sea change?
The experience of isolating in our homes and suburbs has made many people reconsider what they actually value in a home, writes David Hancock. ...Read more
Property
Hot Property: Biggest headlines this week
Victoria’s COVID-19 restrictions have begun to lift as the rest of the country watches on: Here are the biggest property stories from this week. ...Read more
Property
Are we nearing another property boom?
There’s a secret to knowing when the property cycle will take its next turn, and it's not as far away as some may think, according to a property expert. ...Read more
Property
Hot Property: Biggest headlines this week
Based off anecdotal accounts, the property industry is gearing up for a strong spring season: Here are the biggest property stories from this week. ...Read more
Property
Ace a rental application in 5 simple steps
In many areas across Australia, the rental market is becoming increasingly competitive, so how do you ensure your application will stand out? ...Read more
Property
Population falls could see Australia with 232,000 vacant dwellings
The shutdown of international borders could cut demand for Australian housing by as much as 232,000 dwellings over the next three years, according to research. ...Read more
Property
How will border closures impact the property market?
Despite falling migration levels, property prices might not be impacted as much as investors think, an industry expert has explained. ...Read more
Property
Sydney, Brisbane, Melbourne tipped to surge: Westpac
One of Australia’s largest banks is forecasting strong growth in the housing market as low interest rates and availability of credit pushes prices up, despite the country being in its first recessio...Read more
Property
Is now the right time to make a tree or sea change?
The experience of isolating in our homes and suburbs has made many people reconsider what they actually value in a home, writes David Hancock. ...Read more
Property
Hot Property: Biggest headlines this week
Victoria’s COVID-19 restrictions have begun to lift as the rest of the country watches on: Here are the biggest property stories from this week. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
