New analysis from CoreLogic has found that buying a property is cheaper than renting for 36.3% of homes across Australia.
This is an improvement on the last time this analysis was conducted, in February 2020, when it was cheaper to buy than rent 33.9% of homes.
What it means for families
‘Cheaper to buy’ means it takes less money to meet ongoing mortgage repayments than ongoing rental payments. CoreLogic’s analysis assumed borrowers would put down a 20% deposit, take out a 25-year loan and pay a mortgage rate of 2.40%.
The national results hide a lot of geographical variation. For example, a majority of homes in regional locations are cheaper to buy (60.1%) but only a minority in metro locations (28.2%).
Of course, these are broad averages, so your personal situation might be different. If you want an expert to crunch the numbers on your behalf and see what impact a mortgage would have on your finances, get in touch.
What it means for investors
This is a great time to be a property investor, with tenants being forced to fight hard for rental properties, according to new data from SQM Research.
The vacancy rate (the share of untenanted rental properties) fell in every capital city, except Melbourne, between June 2020 and June 2021.
The harder it is for tenants to find accommodation, the easier it is for landlords to raise rents. So, it’s no surprise CoreLogic found that rents rose in all capital cities between the June 2020 and June 2021 quarters (except Melbourne).
With rents rising and interest rates at historic lows, this is a great time to be a property investor.
However, qualifying for a mortgage is often easier said than done, because banks have tight lending standards and turnaround times can be slow.
If you need help navigating this tricky landscape, speak to an expert broker.
