Renting vs buying in Brisbane: The suburbs where it’s cheaper to pay a mortgage than rent - Queensland Property Investor
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Renting vs buying in Brisbane: The suburbs where it’s cheaper to pay a mortgage than rent

Renting vs buying in Brisbane The suburbs where it’s cheaper to pay a mortgage than rent

A  Domain data crunch has revealed where in Australia it’s cheaper to buy a property rather than rent and Brisbane has more suburbs to choose from for buyers than the capitals down south.

The data used mortgage repayments based on the median house or unit price for the suburb — assuming an interest rate of 3.5 per cent and a 20 per cent deposit — with costs like council rates and transfer duties excluded.

In Greater Brisbane, the suburbs where it was cheaper to pay for a mortgage than pay rent were generally found outside of the local government area, in Ipswich, Logan and Moreton Bay.

The Logan suburb of Waterford had the biggest gap between buying and renting, with mortgage repayments calculated at $367 a week compared to $400 per week for rent.

It was followed by Bellmere in Moreton Bay North, where paying the mortgage was $31 a week cheaper, and Loganholme and Crestmead, both in Logan, where mortgage repayments were $30 cheaper a week.

Houses
Suburb
Region
Weekly mortgage repayment
Weekly rent
Difference
Waterford Logan $367 $400 -$33
Bellmere Moreton Bay – North $329 $360 -$31
Loganholme Logan $365 $395 -$30
Crestmead Logan $320 $350 -$30
Redbank Plains Ipswich $315 $340 -$25
Raceview Ipswich $318 $340 -$22
Holmview Logan $373 $395 -$22
Boronia Heights Logan $329 $350 -$21
Bethania Logan $327 $345 -$18
Hillcrest Logan $334 $350 -$16

While there was a similar pattern for apartments, there were also some inner-city suburbs such as Bowen Hills, Spring Hill and Fortitude Valley where mortgage repayments were cheaper than rents.

The best deal was in Eagleby with a $79 difference, but Bowen Hills in the inner city was not far behind with a mortgage repayment of $339 – compared to $418 for weekly rents, a difference of $78.

At the other end of the scale, New Farm’s weekly mortgage repayment was $1498, a whopping $838 above the weekly median rent of $660.

It was a similar story in Ascot, with median mortgage repayments coming in $641 per week more than it cost to rent, while Auchenflower’s repayments were $558 more than rents.

Domain Research analyst Eliza Owen said Brisbane had far more suburbs, compared to Melbourne and Sydney, where mortgages were cheaper to repay.

“Generally what we saw in houses — which is consistent across capital cities — rents outstrip mortgage repayments in more affordable areas,” she said.

Apartments
Suburb
Region
Weekly mortgage repayment
Weekly rent
Difference
Eagleby Logan $221 $300 -$79
Bowen Hills Inner City $339 $418 -$78
Deception Bay Moreton Bay – North $240 $305 -$65
Runcorn Brisbane – South $341 $400 -$59
Spring Hill Inner City $367 $419 -$52
Calamvale Brisbane – South $346 $395 -$49
Fortitude Valley Inner City $358 $400 -$42
Upper Mount Gravatt Brisbane -South $401 $440 -$39
Kallangur Moreton Bay – South $272 $310 -$38
Moorooka Brisbane – South $318 $350 -$32

Ms Owen said lower socio-economic areas of Brisbane might be seeing greater pressure on the rental market because of the hurdles associated with buying.

For example, ABS data showed that Waterford had a much higher percentage of rentals that other parts of the city.

“The competition that results in the rental market might be driving up rents over a mortgage repayment,” she said.

When it came to inner-city Brisbane units, Ms Owen said these properties had more competition from mobile workers, short-term residents and young professionals at the rental stage, which could explain why the rental growth was higher than in other parts of the city.

“Then at the same time, Brisbane has had so much supply, and so much scare around oversupply, that purchase prices have been relatively subdued,” Ms Owen added.

“Brisbane units have actually performed pretty poorly over the past few years, compared to the house market.”

Where mortgage repayments outstrip rents by the most 
Suburb
Region
Weekly mortgage repayment
Weekly rent
Difference
New Farm Brisbane North $1498 $660 $838
Ascot Bayside North $1290 $650 $641
Auchenflower Brisbane West $1108 $550 $558
Clayfield Brisbane North $1092 $540 $552
Bulimba Brisbane East $1181 $643 $538
Hawthorne Brisbane East $1060 $600 $460
St Lucia Brisbane West $984 $550 $434
Robertson Brisbane West $865 $490 $375
Paddington Brisbane West $968 $595 $373
Balmoral Brisbane East $885 $548 $337

At the other end of the scale, prestige areas like New Farm, Ascot and Clayfield would attract a premium from buyers and rental growth in those suburbs would struggle to keep up, she said.

“You’re never going to get the benefits of buying,” Ms Owen noted. “Plus with renting, you can arrange in share arrangements, which makes it even cheaper.”

Ms Owen said while the barriers to entering the Brisbane housing market were challenging, particularly for those on a lower income, the data could help aspiring buyers work out where they’d be placed in terms of managing their mortgage repayments.

“Not everyone is going to be able to afford to buy, but I think what’s helpful about this data set is that it does give perspective on what could be possible for people, if they can overcome the deposit hurdle,” she said.

William Kiln, Mortgage Manager at ING Australia, said housing affordability was an issue around Australia, with putting together the deposit a barrier for many buyers which he said was not going to go away.

“The biggest part of that is not the rental-vs-mortgage,” he said. “It’s the ability to save up for the deposit; that is one of the bigger challenges.

“Where the market is going at moment – interest rates are coming down, and that will help people service their mortgage. The fact is, you still have to save up and have that 20 per cent.”

He said ING was seeing more mortgage applications after the federal election than it had earlier in the year, and people would need to have a strict saving plan to accumulate their deposit.

Renting vs buying in Brisbane The suburbs where it’s cheaper to pay a mortgage than rent 1

John Jessop from Elders Shailer Park said buyers moving into the area or upgrading their home were predominately owner-occupiers.

“The $350,000 to $500,000 is a lot of first-home buyers,” he said, adding that they had a broad range of price points in the area they covered, with properties from as little as $150,000 up to well over $1 million.  

Mr Jessop had noticed the market had picked up since the federal election. “In  the past two to three weeks it’s started to motor again,” he said.

They were also getting buyers from further south, he added, who couldn’t believe the bang for their buck in the area.

When it came to barriers to entering the market, Mr Jessop thought that conditions for business and the labour market were making it harder for young people to buy a home.

“Ten years you basically had a permanent job, nowadays you have people who have two or three jobs,” he said. “The dynamics have changed.”

Meanwhile, in New Farm, demand was coming from young professionals, said Christine Rudolph from Ray White New Farm.

“The attraction of this beautiful suburb is that it sits on a peninsula, with no through access to other suburbs, which makes it unique being so close to the city,” she said.

Renting vs buying in Brisbane The suburbs where it’s cheaper to pay a mortgage than rent 2

She said local professional buyers were attracted to art deco apartments and the 1970s brick apartments were popular with renovators, while investors from Sydney were interested by the affordability compared to the Sydney market, as well as low vacancy rates.

Downsizers, too, were keen on buying New Farm apartments, wanting to be close to the water and the lifestyle it brought.

“Aspirational families in their 30s to 40s are key drivers for house sales,” she said, with the suburb well known for its classic Queenslander homes, as well as newer, premium luxury properties.

Meighan Hetherington, director of Property Pursuit Buyers’ Agents, said in property there was often a negative correlation between rent return and capital growth – that is, areas with strong rental returns often had a slower rate of growth over the long term.

“Many of these suburbs are outside the Brisbane local government area and very popular with first-home buyers,” she said, noting that the top 10 best suburbs for mortgage affordability, compared to rentals, all had a median house price under $400,000.

“At the other end of the scale, the 10 suburbs with the greatest gap between mortgage payments and rental returns are those where land values are much higher and the median house price is well over $1 million.

“But even with these higher prices, interstate buyers are seeing great value in inner Brisbane compared to Sydney and Melbourne.”

She said she was seeing family homes within eight kilometres of the CBD in the $750,000 to $900,000 price range being snapped up particularly quickly.

“We are also seeing new listings in this range attracting multiple offers within the first seven days,” she said.

 

 

Source: www.domain.com.au

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Brisbane

Sentinel Sells Brisbane Industrial Site for $17m

Sentinel Sells Brisbane Industrial Site for $17m

Sentinel Property Group has offloaded another Brisbane site, this time an industrial facility 11 kilometres east of the Brisbane CBD in Hemmant for $17 million.

Centuria Capital snapped up the partially tenanted property in Brisbane’s east through Blue Commercial managing director Gary O’Shea.

The site, which comprises 47,951sq m of general industrial zoned land and features an 11,785 warehouse and 1,240sq m of office space, is located within the Trade Coast Precinct at 46-68 Gosport Street.

Sentinel’s Industrial Trust purchased the property for $16 million in 2012.

Sentinel’s divestment follows on from its recent sale of the Citilink Business Centre at Bowen Hills for $76 million to Prime Super.

The group also purchased the Makerston House office building in Brisbane CBD’s legal precinct for $103 million from investment management company Challenger.

Along with the Brisbane transactions Sentinel managing director Warren Ebert said the group, established by Ebert in 2010, has been active in regional Queensland.

“Particularly in Mackay where our portfolio is approaching $100 million,” Ebert said.

“Mackay has been an important regional market in the national growth and success of Sentinel over the past decade and the company has tremendous confidence in the region’s economic future, particularly with the opening up of the Galilee Basin with Adani’s Carmichael coal and rail project finally approved.”

 

 

Source: theurbandeveloper.com

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Brisbane

Melbourne Top Investment Choice for Chinese Buyers

Melbourne Top Investment Choice for Chinese Buyers

Chinese buyer enquiries for residential property in Australia has recorded two consecutive quarters of year-on-year growth for the first time since 2016, with Melbourne still the most popularAustralian city.

Australia has been losing Chinese buyer interest to other parts of the world due to increased taxes and banking restrictions.

But Australia’s hefty state foreign buyer taxes have been counterbalanced by its weakening dollar according to the latest Juwai.com report, which has seen it drop around 11 per cent of its value against the Chinese Yuan since mid-2018.

Juwai.com CEO Carrie Law says she expects Chinese buying to remain flat in 2019, with forecasts it could start to grow again inline Australia’s property market recovery.

“Chinese buyers make 83 per cent more enquiries about acquiring Melbourne property than they do Sydney,” Law said.

Brisbane has the second fastest rate of Chinese buyer growth. Law said Brisbane recorded 30.8 per cent more Chinese buyer enquiries in 2018.

“Brisbane is becoming a real alternative for the two traditional gateway cities of Melbourne and Sydney.

“The fastest growing cities, in terms of Chinese buyer interest, are Hobart, Brisbane, and Canberra.”

Melbourne receives 43.8 per cent of Chinese buying enquiries in Australia, Sydney 23.9 per cent, Brisbane 10.1 per cent, Perth and Adelaide 6.1 per cent, the Gold Coast 3.7 per cent, Canberra 3.6 per cent, and Hobart 2.6 per cent.

Melbourne Top Investment Choice for Chinese Buyers 1

Weak Aussie dollar boosts buyer interest

Despite the tougher state foreign buyer taxes, Australian’s weakening dollar means it now costs less to secure real estate.

“A buyer holding Yuan today needs the equivalent of $88,800 less in funds compared to 2017 to purchase an $800,000 dwelling,” Law said.

“The plummeting Australian dollar, which has lost 11.1 per cent of its value against the Chinese Yuan since July 2018… [That] compares to the 8 per cent rate of the highest foreign buyer taxes, which are in New South Wales and Victoria.”

Law says Chinese demand is driven largely by growing wealth, a desire to store assets ‘safely’ overseas, education, travel, commercial ties, immigration and high-net-worth immigration, along with environment and lifestyle.

“Eighty-three per cent of Chinese consumers cite education as their reason for immigration, 69 per cent cite environment, 57 per cent cite food safety, and 28 per cent cite asset security.”

 

 

Source: theurbandeveloper.com

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Brisbane

Australia’s Most Expensive Capital City to Rent a House Might Surprise You

Australia’s Most Expensive Capital City to Rent a House Might Surprise You

When it comes to the nation’s most expensive capital city to rent a house, Sydney takes second place in what may come as a surprise to some, with Canberra crowned as Australia’s most expensive capital.

While Domain’s rental report shows Canberra remains as the nation’s most expensive capital to rent a house, it also shows it’s more expensive to rent a house in Hobart than Melbourne.

The latest report, which covers the median rental price for houses and units across the country, shows Melbourne house rents remained unchanged over the year at $430 per week, while unit rents increased 2.4 per cent over the year.

Taking in the unit market, despite Sydney’s price falls of almost 5 per cent over the year the harbour city is still the most expensive capital city to rent a unit.

Australia’s Most Expensive Capital City to Rent a House Might Surprise You 1

Strong construction of new housing has weighed on rents in Sydney, and also contributed to the vacancy rate increasing to 3.2 per cent in June, up from 2.4 per cent one year ago, Domain’s Economist Trent Wiltshere says.

House rents fell by 3.6 per cent over the year to $530 per week.

While unit rents dropped by 0.9 per cent in the quarter and 4.5 per cent over the year.

“Rents held up the best on the Central Coast and on Sydney’s north shore, but fell in other Sydney regions,” the Domain report notes.

While largely thanks to the significant property price falls over the past few years, Sydney’s rental yields have risen slightly.

Australia’s Most Expensive Capital City to Rent a House Might Surprise You 2

Melbourne’s strong population growth since 2013, averaging an annual 2.6 per cent, has seen ongoing rental demand.

House rents grew fastest in the Mornington Peninsula and in Melbourne’s inner-south, but were unchanged in Melbourne’s eastern suburb, for the past year.

Melbourne’s unit rents have increased by 2.4 per cent over the year.

While rent on a typical unit has increased 14 per cent over the past five years to $420, despite the city’s apartment construction boom during this time.

Melbourne’s house rents have also increased 13 per cent during this period.

Australia’s Most Expensive Capital City to Rent a House Might Surprise You 3

Domain says unit rentals have held steady in recent years, despite the large supply of new Brisbane apartments.

“House rents were steady in most parts of Brisbane over the past 12-months, but unit rents increased 6 per cent in the inner city.”

Unit rents also increased by 2 per cent on the Gold Coast and the Sunshine Coast.

And while rental prices for houses across Greater Brisbanerecorded falls in the June quarter, rental prices have remained unchanged year-on-year.

Brisbane’s rental vacancy rate fell from 2.6 per cent to 2.2 per cent over the past year, a sign of a strengthening rental market, Wiltshere says.

Australia’s Most Expensive Capital City to Rent a House Might Surprise You 4

House rents in Adelaide dropped 1 per cent in the June quarter, but have recorded an increase of 2.7 per cent over the year.

Adelaide’s unit rentals have increased by 1.7 per cent over the year, with the typical unit renting for around $305 a week, this makes Adelaide the cheapest across all capitals.

Hobart remains the fourth most expensive city to rent a house behind Canberra and Sydney, according to Domain’s report.

Canberra house rents dropped 3.5 per cent in the June quarter, but are unchanged over the year at $550 per week. Unit rents increased by 4.4 per cent over the year, sitting at $470.

Canberra unit rents have increased a staggering 18 per cent over the past three years, despite an apartment construction boom.

And Darwin rents for houses have now dropped from the 2014 highs of $700 a week to $490. Darwin units have dropped over the past five years from $570 to $385, reflecting declining demand as the city’s population decreases.

Perth remains the most affordable capital city to rent a house in Australia at $365 a week. Rental prices for both Perth houses (up 4.3 per cent) and units (up 3.3 per cent) have increased over the past year.

 

 

Source: theurbandeveloper.com

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