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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

Suburb Property Type Weekly Mortgage Repayment Weekly Rent Difference between buying and renting
Lakemba Unit $ 369 $ 370 -$1

Melbourne

Suburb Property Type Weekly Mortgage Repayment Weekly Rent Difference between buying and renting
Abbotsford Unit $ 452 $ 455 -$3
Bundoora Unit $ 356 $ 360 -$4
Carlton Unit $ 431 $ 450 -$19
Collingwood Unit $ 456 $ 475 -$19
Dandenong Unit $ 272 $ 295 -$23
Epping Unit $ 321 $ 330 -$9
Kensington Unit $ 413 $ 420 -$7
Melbourne Unit $ 461 $ 540 -$79
North Melbourne Unit $ 408 $ 430 -$22
Southbank Unit $ 519 $ 560 -$41
Windsor Unit $ 389 $ 410 -$21

Brisbane-Greater Brisbane

Suburb Property Type Weekly Mortgage Repayment Weekly Rent Difference between buying and renting
Albion Unit $ 378 $ 380 -$2
Beenleigh House $ 328 $ 340 -$12
Bellmere House $ 329 $ 360 -$31
Bethania House $ 327 $ 345 -$18
Boronia Heights House $ 329 $ 350 -$21
Bowen Hills Unit $ 339 $ 418 -$78
Brassall House $ 327 $ 330 -$3
Bray Park House $ 408 $ 410 -$2
Brisbane City Unit $ 484 $ 490 -$6
Bundamba House $ 304 $ 310 -$6
Caboolture South House $ 312 $ 320 -$8
Calamvale Unit $ 346 $ 395 -$49
Capalaba Unit $ 354 $ 380 -$26
Chermside Unit $ 377 $ 380 -$3
Cleveland Unit $ 405 $ 415 -$10
Collingwood Park House $ 329 $ 330 -$1
Crestmead House $ 320 $ 350 -$30
Deception Bay Unit $ 240 $ 305 -$65
Eagleby Unit $ 221 $ 300 -$79
East Brisbane Unit $ 359 $ 365 -$6
Fortitude Valley Unit $ 358 $ 400 -$42
Goodna House $ 312 $ 315 -$3
Hillcrest House $ 334 $ 350 -$16
Holmview House $ 373 $ 395 -$22
Kallangur Unit $ 272 $ 310 -$38
Kelvin Grove Unit $ 369 $ 400 -$31
Kingston House $ 309 $ 320 -$11
Loganholme House $ 365 $ 395 -$30
Moorooka Unit $ 318 $ 350 -$32
Morayfield House $ 336 $ 350 -$14
Morayfield Unit $ 300 $ 310 -$10
Mount Gravatt East Unit $ 389 $ 400 -$11
Mount Warren Park House $ 371 $ 385 -$14
Nundah Unit $ 359 $ 370 -$11
Raceview House $ 318 $ 340 -$22
Redbank Plains House $ 315 $ 340 -$25
Regents Park House $ 378 $ 380 -$2
Richlands Unit $ 341 $ 360 -$19
Rothwell House $ 383 $ 390 -$7
Runcorn Unit $ 341 $ 400 -$59
Spring Hill Unit $ 367 $ 419 -$52
Springfield Lakes House $ 392 $ 400 -$8
Taringa Unit $ 364 $ 369 -$5
Upper Mount Gravatt Unit $ 401 $ 440 -$39
Waterford House $ 367 $ 400 -$33
Yarrabilba House $ 369 $ 370 -$1

 

Source: theurbandeveloper.com

Brisbane

Bridge to 2032 – Brekky Ck span approved, missing link for Games athletes’ village

Brisbane is set to have another major infrastructure project underway by the end of the year after Lord Mayor Adrian Schrinner lodged the final design of the Breakfast Creek green bridge with planning officers for approval.

The $67 million project is likely to provide a smoother connection for pedestrians and cyclists moving between the fast-growing riverside development at Northshore Hamilton and the CBD.

The 80-metre arch will cross Breakfast Creek to connect Newstead Park with the existing Lores Bonney riverwalk which was part of the now completed Kingsford Smith Drive upgrade.

“This is a crucial step towards securing the final approvals we need to commence work on the green bridge that will provide a $67 million investment in local industry, deliver a new active transport options and create 140 local construction jobs,” Schrinner said.

“The Lores Bonney Riverwalk is currently used 2300 times a day, and this new green bridge will improve safety and increase capacity to the riverwalk by creating a continues walking and cycling connection.”

He said the Breakfast Creek project would join the now-approved Kangaroo Point green bridge as fast-tracked investments to create jobs as the city headed out of the coronavirus pandemic.

Brekky Ck

The council has also linked the project to the 2032 Olympics, saying it will be a “key connector” for the planned Athletes Village at Hamilton and provide a critical transport link for the Games.

Two other cross-river pedestrian and cycle links connecting Toowong to West End and St Lucia to West End remain on the council’s green bridge program books but are yet to be funded.

The council insists the remaining bridges need federal and state government funding to go ahead.

 

Article Source: inqld.com.au

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Brisbane

Green ‘Grand Central’: Cross River Rail unveils changes to parklands vision

Cross River

Developers of Queensland’s biggest infrastructure project, the $5.4 billion Cross River Rail, appear to have bowed to public pressure and moved to preserve more public space in its redesign of the city’s Roma Street parklands precinct.

The Cross River Rail Delivery Authority has confirmed it will allow more public open space in a revised development plan for the area.

A new development scheme for the Roma St precinct, which will contain the state’s most most important transport interchange (dubbed Grand Central) as well as the proposed Brisbane Live arena, identifies new green areas and more affordable housing than was originally planned.

The Palaszczuk government has insisted that the development of an underground Roma St station as part of Cross River Rail is a chance to revitalise an under-used part of Brisbane into a major opportunity for private investment.

The government expects that over the next 15 years there will be nearly 4200 new residents and more than 19,700 new workers within the 32 hectare Roma Street priority development area, bounded roughly by Wickham Terrace, North Quay and College Rd.

However, the delivery authority came under fire for giving over part of the Roma St parklands which houses a public car park and Brisbane City Council maintenance depot to residential and commercial development.

The authority now says under the finalised development scheme the precinct would have more “publicly accessible open space”.

“The existing 11 hectares of publicly accessible open space within the Roma St Parklands will not only be protected forever, but will be expanded even further by more than two hectares,” the authority said in a statement.

“The development scheme also provides for new social and affordable housing as part of new residential buildings parallel to the rail corridor, adding to the existing apartment complexes along Parkland Boulevard.”

“This scheme is all about renewing one of Brisbane’s most underutilised inner-city locations while protecting and enhancing the beautiful natural features that already exist. ‘

About 46,000 people each weekday are expected to use the new high-capacity underground station at Roma Street by 2036.

 

Article Source: inqld.com.au

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Brisbane

Brisbane Olympics to Push Property Market’s Limits

Brisbane

Brisbane house prices will hit the $1-million median well before the 2032 Olympics with suburbs near venues tipped to move up to $3.9 million.

Property projections from PRD Research indicate the median price would reach $1.7 million by 2033 and would be “immensely” boosted on the Gold and Sunshine coasts.

PRD chief economist Diaswati Mardiasmo said it was clear that hosting major events had served the property market well.

“The year after the 2000 Sydney Olympics, Newington (site of the athletes’ villages) and surrounding suburbs’ median house prices grew by 13.4 per cent,” Mardiasmo said.

“Median house price growth was not limited to the year after the Olympics. It grew by 38.5 per cent two years after, and 66.4 per cent three years after.

“The year after World Expo 88, South Bank and its surrounding suburbs grew by an average of 19.1 per cent and by 10.3 per cent after G20 Summit 2014.”

Brisbane property price predictions: Olympics 2032

Suburb 2011 2021 Projected Growth G20 Average
Hamilton house $824,000 $1,650,000 $3,990,670
Tennyson house $515,000 $970,000 $2,052,520
Chandler house $1,040,000 $1,600,000 $3,385,600
Woolloongabba house $623,000 $951,000 $2,012,316
South Brisbane house $805,000 $1,210,000 $2,560,360
Redland Bay house $450,000 $638,000 $1,350,008
Ipswich house $325,000 $435,000 $1,052,086
Herston house $697,000 $908,000 $1,921,328
Spring Hill house $950,000 $1,150,000 $2,433,400
Coomera house $353,000 $550,000 $1,163,800
Broadbeach units $463,000 $625,000 $1,322,500
Alexandra Headland house $570,000 $1,110,000 $3,348,760
Twin Waters house $651,000 $1,077,000 $2,278,932

^Source: PRD Research, AMP Pricefinder

“Bearing in mind the 2032 Olympics are still 11 years away, and based on how the Brisbane market is travelling, the potential to eclipse this price point is high,” Mardiasmo said.

“Regardless of the calculation method, the conclusion points us to Brisbane becoming a $1-million median house price city sooner rather than later. ”

Domain’s latest house price report showed median house price in Brisbane was $678,236, up 13 per cent annually.

Meanwhile, prices on the Gold Coast and Sunshine Coast hit $792,000, up 18.2 per cent on last year, and $825,000 up 23.1 per cent, respectively.

Domain chief of research Nicola Powell said at the moment, low listing numbers and interstate migration were driving the price hike.

“It suggests that upgrading homeowners are fuelling house prices, as well as interstate and expat buyers moving from more expensive cities,” Powell said.

Melbourne and Canberra officially joined Sydney in the $1-million home club in the July results.

 

Article Source: www.theurbandeveloper.com

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