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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

May 2021: How did Brisbane apartment values perform in April?

Brisbane’s median apartment value reached a 2020 high of $390,000. Now it’s $406,000.

Brisbane apartment values are continuing their surge, according to property data firm CoreLogic.

Values rose one per cent, the same as Melbourne.

It puts Brisbane’s rolling quarterly apartment gain at three per cent, following jumps of 1.7 per cent in March and one per cent across February.

Brisbane’s median apartment value reached a 2020 high of $390,000. Now it’s $406,000, up from just over $400,000 last month.

Apartments in Brisbane around the new median

Breeze, West End
Price – One bedroom apartments from $409,000

Brisbane apartment

Breeze West End 43 Ferry Road, West End QLD 4101

Forming part of Pradella’s $1 billion masterplanned Riverside West End community, Breeze 110 apartments in Brisbane’s south.

It features a number of resort-style amenities as well as abundant green open spaces and retail offerings.

A rooftop skygarden terrace complete with a 20-metre lap pool and landscaped entertainment area crowns the 11-storey complex.

The Coterie, Fortitude Valley

Price – One bedroom apartments from $383,300

Brisbane apartment value

The Coterie 365 St Pauls Terrace, Fortitude Valley QLD 4006 

The completed Fortitude Valley development The Coterie by Vicland Property Group, Rothelowman and Bruce Henderson Architects has views across Brisbane from its St Pauls Terrace location, just 1.5 kilometres from the CBD.

The site’s original heritage bakery facade and feature interior elements of St Pauls have been carefully integrated into the development to preserve the history of the Valley with a convenient cafe offering a welcoming, local face to the modern community.

The 249 apartment development features a private rooftop retreat atop each tower, landscaped gardens, sun decks, a swimming pool and alfresco entertaining zone.

Renovaré, Yeronga

Brisbane apartment value

Renovaré Yeronga 174 Venner Road, Yeronga QLD 4104 

Price – One bedroom apartments from $389,000

The Gardner Vaughan Group Yeronga project Renovaré is offering its one bedroom apartment from $389,000. They’ve recently released their third stage, Vensuto, made up of 33 one, two, three and four bedroom apartments.

The project has achieved a five-leaf rating of sustainability from The Urban Development Institute of Australia (UDIA) which highlights the features and positive impact on the environment and community.

 

Article Source: www.urban.com.au

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Brisbane

Investors spark frenzy on Brisbane’s commercial property market

commercial property market

Certain commercial property markets in Brisbane saw their best March on record, with the city’s south enjoying a “frenzied” success as investors flocked to snap up warehouses and logistics centres, new data has revealed.

The sale of commercial property in suburbs to the north of Brisbane CBD went into overdrive in March, while the city’s south recorded one of the best months in over 20 years for industrial precincts such as Rocklea, Sumner, Raceview and Loganholme, Raine & Horne revealed in a recent market update.

According to its commercial division, astute investors and owner-occupiers taking advantage of the low interest rate environment are turbo-charging higher than normal sale volumes in Brisbane’s northern suburbs.

“Record-low interest rates mean that investors have to look for alternative places to park their funds, so quality assets with good tenants are in red hot demand,” Trent Bruce, managing director of Raine & Horne Commercial Brisbane North, said.

Mr Bruce revealed that some of the best-performing suburbs in the north were Albion, Chermside, Strathpine, Bowen Hills, Stafford, Hendra, Lawnton and Geebung, with investors from Sydney and Melbourne also said to be showing considerable interest.

“This interest is undoubtedly a result of the current strong interstate migration to Queensland following the impact of lockdowns in the southern states,” Mr Bruce said.

Joseph Grasso, director of Raine & Horne Commercial Brisbane Southside, agreed that poor cash returns are driving investors to Brisbane commercial real estate.

“Money in the bank is generating returns of 0.3-0.4 per cent, if you’re lucky, on a term deposit over 12 months.

“In comparison, the returns that commercial property provide are very attractive, while investing in the stock market is still a volatile ride,” Mr Grasso said.

He revealed that in the south of Brisbane, it is the warehouses and logistics that are becoming increasingly popular.

“Reflecting some residential markets around Australia, there is an element of FOMO (fear of missing out) driving some investors to snap up warehouses in Brisbane’s southside,” he said.

Consequently, Mr Grasso noted, since September last year, the yields for industrial warehouses have fallen by about 1 per cent in Brisbane’s southern commercial precincts.

“In April 2020, it was possible to buy industrial property in Brisbane’s southside for 6.5 per cent net. Now it is closer to 5.5 per cent,” he concluded.

Moreover, Mr Grasso pointed out, non-listed fund groups are making their presence felt in Brisbane’s southside markets.

“They are even playing in markets under $5 million that are usually the domain of private investors, and this activity is adding to demand levels.

“It’s a sellers’ market, so the savvy investors are trying to lock up assets with off-market sales,” he concluded.

 

Article Source: www.smartpropertyinvestment.com.au

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Brisbane

Brisbane house prices hit record-breaking highs

Brisbane house prices

Brisbane house prices have soared to record heights for the seventh consecutive quarter, with five blue-chip pockets now topping the $1 million median mark.

According to the latest Domain House Price Report, greater Brisbane house prices shot up by 1.7 per cent price over the March quarter to an unprecedented $632,999, with the average home in the capital’s inner ring – as well as Indooroopilly and Sherwood – now likely to set you back more than a $1 million.

Those key hot spots included Brisbane inner city, inner east, inner west and the inner north – where house prices skyrocketed by 13 per cent over the past year to $1.2 million, 13.2 per cent to $1.053 million, 10.4 per cent to $1.17 million and 13.1 per cent to $1.1 million, respectively.

Sherwood and Indooroopilly were the only suburbs outside the inner-city sanctum to reach seven figures after a 5.8 per cent price rise over the same period placed houses in the combined area at a hefty $1.035 million.

Property punters have put the ongoing growth spurt down to cheap credit, low stock levels and rising house rents, while citing skyrocketing interstate migration as a key driver with reports out-of-state home hunters now make up a whopping 50 per cent of buyers in some pockets.

While it’s a perfect storm that’s lead to historically high house prices, Domain senior research analyst Nicola Powell said, for Sydney and Melbourne buyers, the sunshine state capital was still seen as a haven for bargain abodes.

“[The current house price] is 6.2 per cent higher than the same time last year … but [despite that growth] Brisbane is still affordable compared to other capitals … and buyers moving from Sydney and Melbourne will have deeper pockets so I think the fundamentals are there for continued price growth,” Dr Powell said.

Top house prices

Region Mar-21 Mar-20 Mar-16 YoY
Caboolture Hinterland $475,000 $405,000 $370,000 17.3%
Brisbane Inner – East $1,053,000 $930,000 $795,000 13.2%
Brisbane Inner – North $1,100,000 $972,500 $830,000 13.1%
Brisbane Inner $1,200,000 $1,061,500 $883,750 13.0%
Carindale $890,000 $790,000 $697,000 12.7%
Redcliffe $540,000 $485,000 $427,250 11.3%
Sandgate $569,000 $515,000 $451,000 10.5%
Brisbane Inner – West $1,170,000 $1,060,000 $850,000 10.4%
The Hills District $685,585 $621,750 $560,000 10.3%
Wynnum – Manly $700,000 $640,000 $570,000 9.4%
North Lakes $500,000 $460,000 $420,000 8.7%
Holland Park – Yeronga $900,000 $828,750 $699,000 8.6%
The Gap – Enoggera $731,900 $675,000 $590,000 8.4%
Nathan $750,000 $693,500 $615,000 8.1%
Kenmore – Brookfield – Moggill $866,000 $810,813 $710,000 6.8%
Bribie – Beachmere $548,500 $513,500 $415,000 6.8%
Jimboomba $561,000 $527,500 $470,750 6.4%
Sherwood – Indooroopilly $1,035,000 $978,000 $806,500 5.8%

But while the latest data will hit some home hunters with shallow pockets where it hurts, Dr Powell said, aspects of the market were still moving at a snail’s pace.

“Brisbane still has a two-speed market, with unit prices falling over the quarter and year, down 0.5 per cent and 1.1 per cent lower respectively. Affordability has improved for buyers who are paying a multi-year low for a unit at $398,612.

“The divergence of house and unit prices has made the value gap between purchasing a house and unit the largest on record.”

Despite the lag, unit prices in some sectors soared, with Redcliffe leading the charge after prices rose a whopping 23.4 per cent over the past year to $480,000.

It’s a surge that Ray White Redcliffe business owner Andrew Campbell said came off the back of incredibly tight house stock, sparking the agency to post record month after record month since January this year.

“A lot of our stock now is units and when we have houses, they are sold at the first open home,” Mr Campbell said. “A lot of people are now downsizing … and we are seeing some of our highest unit sales in three months.

“We sold a unit at 501/2 Prince Edward Parade, Redcliffe, for $1.345 million about six weeks ago – which was a great result – so while it’s hard to say what units will do as they always tend to lag, I think we’ll see some significant growth.

“There’s definitely still room on the peninsula as a whole because it has been so undervalued for so long.”

While interstate buyers have helped fuel the growth, Mr Campbell said, most home hunters were local – and their appetite was insatiable.

Top unit prices

SA3 Mar-21 Mar-20 Mar-16 YoY
Redcliffe $480,000 $389,000 $380,000 23.4%
Brisbane Inner – West $480,000 $445,000 $515,000 7.9%
Bald Hills – Everton Park $483,000 $450,000 $430,000 7.3%
Cleveland – Stradbroke $489,500 $458,250 $455,000 6.8%
Chermside $409,500 $385,000 $455,000 6.4%
Narangba – Burpengary $292,000 $275,000 $252,500 6.2%
Capalaba $412,500 $390,000 $382,000 5.8%
Carindale $509,300 $482,000 $470,000 5.7%
Brisbane Inner – North $480,000 $465,000 $492,000 3.2%
Bribie – Beachmere $371,250 $360,500 $333,000 3.0%

“In March we clocked 21 home transactions, which was $14.9 million in sales. This time last year was $3.3 million from six but that was pandemic mode. The year before [at the same time] we did 15 sales totalling $7 million and that was our benchmark,” he said.

“The number of buyers has increased dramatically by 20 and 30 per cent.”

Ray White New Farm agent Christine Rudolph said in the city’s inner pockets such as Paddington, Teneriffe/New Farm, Hawthorne and out to Indooroopilly, the mass interstate migration had reached record highs, sparking a severe rent shortage that was further fuelling house prices.

“We are continuing to see a massive drive of interstate and expat inquiry … in the prestige market 50 per cent of our sales are driven by local buyers and the other 50 per cent are from interstate and overseas,” Ms Rudolph said.

“In New Farm a high degree of our traffic is coming from the Sydney eastern suburbs and they say they can’t believe the value and how affordable it is here.”

In Sydney, house prices have soared to an unprecedented $1.3 million median, the Domain House Price Report showed, while Melbourne’s unit and house prices were both at record highs.

 
But while sun-seeking southerners forking out the big bucks were sparking major growth, Ms Rudolph said, the ongoing lack of stock, particularly at the prestige end, and COVID-fuelled property trends had further shot up house medians.

“We’ve definitely seen a change in trends since COVID – people have had more opportunity to spend time in their homes … and people are craving space and they are craving a view and beautiful gardens,” she said.

“It’s spurring the price growth and there’s also a degree of ‘FOMO’ at the moment because a lot of the local buyers are mindful of this continued interstate migration.”

Place Estate Agents Bulimba joint managing director Paul Curtain said in some prime pockets of the city’s inner east, price growth had averaged 12 per cent in the past quarter alone, with the traditionally lower end of the market nothing short of booming.

“An average house in somewhere like Camp Hill with perhaps three bedrooms and one bathroom on a 405-square-metre block might have sold for low $700,000s about 12 months ago … but now [homes like these] are selling for over $900,000,” Mr Curtain said.

He said interstate buyers were also making up about 50 per cent of buyers in his patch and said the cosmopolitan vibes and abundance of cafes and top eateries made the region particularly appealing to migrants from Melbourne, Sydney and overseas – especially for those who could snap up a house for 25 per cent less than in suburbs such as New Farm.

Across the city, the Domain data further revealed the Brisbane north region – which spans Stafford to Brighton – was one of the capital’s top performing regions after house prices rose 4.9 per cent over the past quarter to $670,094 – up almost 10 per cent year on year.

 

Article Source: www.domain.com.au

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