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The Suburbs Cheaper to Buy Property than Rent

The Suburbs Cheaper to Buy Property than Rent

Could the gap between renting and owning a piece of Australian real estate be narrowing?

Despite the nation’s cooling housing market over recent years, home affordability is an ongoing issue with five of Australia’s major housing markets ranking last year as “severely unaffordable”.

But thanks to some data crunching, property portal Domain has identified Australian suburbs in major capital cities where it’s cheaper to buy a home than rent one.

With the reserve bank cutting rates twice in the past six weeks to historic lows, falling interest rates is the main factor creating affordability for first home buyers, bringing the typical mortgage rate down to around 3.5 per cent, with forecasts it’s likely to go lower.

Too good to be true?

While some suburbs in the findings may not be worthwhile investments, Domain research analyst Eliza Owens says the data is a tool to provide would-be home buyers insight to the local property market.

“We thought it would be an interesting data set, particularly in giving hopeful home buyers perspective in what housing costs can be,” Owens told The Urban Developer.

The standout suburbs?

Owens says the biggest surprise from the findings was the buying options for units located in inner Melbourne and inner Brisbane.

“In these suburbs, it was actually cheaper to pay off a mortgage on that typical purchase point than it was to rent,” Owens said.

“So inner city suburbs of Brisbane like Bowen Hills, Fortitude Valley and Spring Hill have an average rental premium of $57 in rent over the median mortgage repayment.

“Melbourne’s inner city suburbs included Southbank, Melbourne, and North Melbourne with the data showing it worked out to be around $1000 to $2000 cheaper annually.”

Domain compared rent and mortgage repayments across 42 per cent of greater Sydney, but Lakemba was the sole suburb that showed up in Sydney’s findings, with a mortgage repayment on a comparable property cheaper by $1 per week than the median rental price.

But Owens said there are suburbs across greater Sydney where first home buyers could consider buying in if they were able to increase the weekly budget by up to $100.

“They were mainly the western suburbs of Sydney and the northern part of the central coast, areas like Blue haven for example,” Owens said.

“In Blue Haven there was about $35 in the difference between the mortgage repayments and median asking rents.”

While in Queensland, taking in greater Brisbane, Domain saw a spread of 45 suburbs across both housing and unit stock show up in the results.

The calculations

Domain looked at what it costs to buy for a typical first home buyer armed with a 20 per cent deposit, as a key assumption. No added costs are included, such as transfer duties, strata or council rates.

The analysis is based on sales and rent data over the 12-months to April, and the results only includes suburbs that had a minimum of 50 rental and sale observations over the year to April.

Weekly mortgage repayments are based on the median house or unit price for the suburb, on a mortgage rate of 3.5 per cent, taking in the recent cash rate cuts.

Sydney

SuburbProperty TypeWeekly Mortgage RepaymentWeekly RentDifference between buying and renting
LakembaUnit$ 369$ 370-$1

Melbourne

SuburbProperty TypeWeekly Mortgage RepaymentWeekly RentDifference between buying and renting
AbbotsfordUnit$ 452$ 455-$3
BundooraUnit$ 356$ 360-$4
CarltonUnit$ 431$ 450-$19
CollingwoodUnit$ 456$ 475-$19
DandenongUnit$ 272$ 295-$23
EppingUnit$ 321$ 330-$9
KensingtonUnit$ 413$ 420-$7
MelbourneUnit$ 461$ 540-$79
North MelbourneUnit$ 408$ 430-$22
SouthbankUnit$ 519$ 560-$41
WindsorUnit$ 389$ 410-$21

Brisbane-Greater Brisbane

SuburbProperty TypeWeekly Mortgage RepaymentWeekly RentDifference between buying and renting
AlbionUnit$ 378$ 380-$2
BeenleighHouse$ 328$ 340-$12
BellmereHouse$ 329$ 360-$31
BethaniaHouse$ 327$ 345-$18
Boronia HeightsHouse$ 329$ 350-$21
Bowen HillsUnit$ 339$ 418-$78
BrassallHouse$ 327$ 330-$3
Bray ParkHouse$ 408$ 410-$2
Brisbane CityUnit$ 484$ 490-$6
BundambaHouse$ 304$ 310-$6
Caboolture SouthHouse$ 312$ 320-$8
CalamvaleUnit$ 346$ 395-$49
CapalabaUnit$ 354$ 380-$26
ChermsideUnit$ 377$ 380-$3
ClevelandUnit$ 405$ 415-$10
Collingwood ParkHouse$ 329$ 330-$1
CrestmeadHouse$ 320$ 350-$30
Deception BayUnit$ 240$ 305-$65
EaglebyUnit$ 221$ 300-$79
East BrisbaneUnit$ 359$ 365-$6
Fortitude ValleyUnit$ 358$ 400-$42
GoodnaHouse$ 312$ 315-$3
HillcrestHouse$ 334$ 350-$16
HolmviewHouse$ 373$ 395-$22
KallangurUnit$ 272$ 310-$38
Kelvin GroveUnit$ 369$ 400-$31
KingstonHouse$ 309$ 320-$11
LoganholmeHouse$ 365$ 395-$30
MoorookaUnit$ 318$ 350-$32
MorayfieldHouse$ 336$ 350-$14
MorayfieldUnit$ 300$ 310-$10
Mount Gravatt EastUnit$ 389$ 400-$11
Mount Warren ParkHouse$ 371$ 385-$14
NundahUnit$ 359$ 370-$11
RaceviewHouse$ 318$ 340-$22
Redbank PlainsHouse$ 315$ 340-$25
Regents ParkHouse$ 378$ 380-$2
RichlandsUnit$ 341$ 360-$19
RothwellHouse$ 383$ 390-$7
RuncornUnit$ 341$ 400-$59
Spring HillUnit$ 367$ 419-$52
Springfield LakesHouse$ 392$ 400-$8
TaringaUnit$ 364$ 369-$5
Upper Mount GravattUnit$ 401$ 440-$39
WaterfordHouse$ 367$ 400-$33
YarrabilbaHouse$ 369$ 370-$1

 

Source: theurbandeveloper.com

Brisbane

Brisbane won’t be as affected by onsite auction ban as Sydney and Melbourne

Brisbane won't be as affected by onsite auction ban as Sydney and Melbourne

Realestate.com.au chief economist Nerida Conisbee says only about 10 per cent of residential sales in Queensland utilise the auction process.

“Brisbane’s not a big auction market anyway so it won’t have the same impact we’ll see in Melbourne and Sydney,” Ms Conisbee told realestate.com.au.

Realestate.com.au has launched virtual tours of properties listed on its site to help home hunters.

“For people looking to buy, the bigger deal will be not being able to go into the home,” Ms Conisbee said.

 

 

This article is republished from www.propertyobserver.com.au under a Creative Commons license. Read the original article.

 

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Brisbane

Brisbane buyers pay big prices for property that can survive self-isolation

Brisbane buyers pay big prices for property that can survive self-isolation

Cashed-up buyers keen to pour their savings into bricks and mortar instead of shares are keeping Brisbane’s prestige property market afloat as homes with big living spaces, large courtyards and enough creature comforts to survive self-isolation jump to the top of luxury home wish lists.

Amid a rapidly changing real estate world of virtual auctions, cancelled open homes and economic uncertainty, property punters have revealed strong buyer appetite remains within the high-end market as multimillion-dollar abodes continue to sell under the hammer and by private treaty.

Just days ago, Place Kangaroo Point agent Simon Caulfield sold a luxury three-bedroom property at 1E/39 Castlebar Street, Kangaroo Point, for $3.2 million cash unconditional, to two doctors he said were keen to not only buy the home of their dreams, but one that was perfect for a long self-isolation.

He said bottomed-out interest rates and competitive prices were the icing on the cake for those in a position to purchase with virtual tours, private inspections and 3D online walk-throughs making contactless buys a virtual walk in the park.

“I’ve got a buyer at the moment that we’re working with who’s looking for homes in the vicinity of $8 million dollars and we’ve done all virtual tours. In fact, we’re actually more efficient now and it’s making our lives easier to a point,” Mr Caulfield said.

“Wednesday night we had two auctions at our in-room events and nine registered bidders with a total of those seven bidding by phone.

“One sold under the hammer and the other one is in post-auction negotiations.

“Everyone who wants to (and is able to) buy is seeing the current climate as an advantage.

“There are people who have saved money, so they are trying to upgrade to the next price point and that was evident on Wednesday night. People are also looking at investments and bricks and mortar assets are quite attractive compared to stocks.”

While the nation continues to undergo daily changes and restrictions to flatten the COVID-19 curve, Mr Caulfield said Place agencies had already been working remotely and digitally for a couple of years with public open homes now switched to private inspections.

The need to upgrade into a bigger family home inspired Kristine Malone to place her luxury four-bedroom apartment at 4/2 Scott Street, Kangaroo Point, on the market just a few weeks ago, with strong buyer interest ramping up ahead of the April 1 auction.

She said while her and her family were sad to say goodbye to their beloved abode, they were thrilled at the high level of inquiry the massive 377-square-metre home had received, even amid the COVID-19 chaos.

“I think a lot of people watched this building take shape and so we’ve had a huge amount of interest from both interstate and local buyers,” Mrs Malone said.

“It is a really lovely family building, and, despite us moving out because of our family expanding rather than contracting, we have mixed emotions about leaving.”

The full-floor home, which is one of just a handful in the iconic Walan Residences, features a large balcony, three bathrooms, a gym and expansive river-front views.

The last apartment to sell in Walan Residences achieved $4.5 million in November 2019.

As prestige property transactions and interest remain strong, real estate agents across Brisbane are continuing to chalk up sales from entry level abodes through to four-bedroom houses with almost $4 million worth of real estate sold under the hammer at Ray White Sherwood and Graceville’s inaugural virtual auction on Wednesday night.

Agency principal Cameron Crouch said his team sold 80 per cent of the order of sale at the virtual auction theatre with 28 homes set to further go up for auction over the coming weeks.

“We have technology processes in place to remain ‘business as usual’ in this new environment of private inspections, virtual inspections and weekly auctions,” he said.

 

 

This article is republished from www.domain.com.au under a Creative Commons license. Read the original article.

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Brisbane

Coronavirus pandemic to slug Queensland’s property prices, industry figures say

Coronavirus pandemic to slug Queensland's property prices, industry figures say

For Queensland mortgage broker and property consultant Carolyn Walshe, it is not a matter of if, or when, the coronavirus will hit property prices, but by how much and for how long.

“You’d have to expect that they’re going to fall,” Ms Walshe said.

“The question is going to be just exactly how much — I think the smartest thing that people can do right now is just to hold back and wait and see what happens over the next few months.”

The latest figures show Queensland reached record median house prices for Brisbane, Noosa and other parts of the state in the last quarter of 2019.

Real Estate Institute of Queensland (REIQ) chief executive Antonia Mercorella agreed that COVID-19 would put a dent in that.

“Inevitably we will see the property market impacted by the coronavirus — I think it would be incredibly naive to think otherwise,” Ms Mercorella said.

“We know that a large volume of people will lose their jobs during this time.

“We know that it will completely erode confidence and those things — security and confidence — are very much key to the property market.”

Last night, Prime Minister Scott Morrison included the property sector in the latest moves to limit social interaction.

“Real estate auctions and open house inspections, in particular open house inspections — that cannot continue,” Mr Morrison said.

He said that from midnight tonight they would not be allowed.

Lenders, investors cannot foresee what’s to come

Ms Walshe, who also advised clients through the global financial crisis — suggested the forced shutdowns of parts of the economy, the restrictions on travel and the massive queues for Centrelink all added to the uncertainty.

“The list of instructions that people have to live under is breathtaking, so until we see some endpoint to all of that, it’s going to be very, very difficult to see exactly where the other side is,” Ms Walshe said.

Ms Walshe said the fact the Federal Government had moved the budget from May to October showed neither it nor investors, could foresee what was to come with any certainty.

“I don’t think anyone can have a lot of confidence at the moment until we see things that are far less alarming,” Ms Walshe said.

“Therefore, less property sales will complete until we have some confidence returned to the market and people are back at whatever semblance of normal work is.”

She said banks would be reluctant to lend, as people’s ability to repay loans also looked uncertain.

“Lenders are now going to be seriously looking at [the] possibility of there being lower numbers of borrowers who are in occupations where their income can be absolutely guaranteed,” Ms Walshe said.

Ms Mercorella said while some investors would be reluctant, others might pounce.

“We will see some investors perhaps getting cold feet and making a decision to suspend that,” Ms Mercorella said.

“But similarly, we will see some prospective investors being quite bullish about it and actually looking at this as an opportunity and probably pouncing on what’s available to try and secure a property at a better price, at a lower price.”

Coronavirus pandemic to slug Queensland's property prices, industry figures say (1)

Renters and landlords also to come under strain

Ms Mercorella said the REIQ’s immediate concern was tenants facing eviction for not being able to make their rent.

“Around 35 per cent of the Queensland population rents,” she said.

“The vast majority of that supply comes via the private investor, so given the predicted job losses, we are concerned about the impact that will have on a tenants ability to make their rent obligations.

“We don’t want to see renters being evicted on account of non-payment.”

She said the REIQ welcomed any support governments could give to tenants.

“Equally, what we need to be cognisant of is that the vast majority of that rental supply is coming from private investors — mum and dad investors — and they will have their own obligations at the other end to the bank.” Ms Mercorella said.

“So the challenge will be how we protect tenants in this in this environment, but also supporting owners who ultimately — if they don’t meet those obligations — will end up defaulting on mortgages, and ultimately having to sell those properties and losing those properties, which will mean that we all lose.”

Coronavirus pandemic to slug Queensland's property prices, industry figures say (2)

Ms Mercorella said there was hope the property market would recover relatively quickly.

She said the Queensland market was robust and recovered well from the global financial crisis.

“Again, we bounced back from the GFC rather well, but I but I do expect that this will be far more severe than that,” she said.

“It will also depend on how long we’re in the situation for, so it really is crystal ball gazing at this stage.”

 

 

 

 

This article is republished from www.abc.net.au under a Creative Commons license. Read the original article.

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