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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

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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