Weekly mortgage repayments for a property in Ascot are almost twice the cost to rent per week, which makes renting in this area cheaper than buying, the latest analysis by Domain says.
Brisbane, however, has more suburbs where it’s more affordable to buy than to rent, according to Domain’s study of mortgage repayments based on the median house or unit price for the suburb. The analysis assumed an interest rate of 3.5 percent and a 20 percent deposit and excluded costs like council rates and transfer duties.
The suburb of Waterford in Logan showed the biggest difference between the cost to buy and cost to rent. The weekly mortgage repayments for a house in Waterford is $367, which is cheaper by $33 compared to renting weekly. Bellmere, Loganholme, Crestmead, and Redbank Plains make up the top five locations where it is cheaper to buy than to rent.
On the flipside, expensive suburbs like New Farm, Ascot, and Clayfield where buyers are willing to pay a premium and rental market struggles to grow, it is way cheaper to rent than to buy.
Renting in Ascot, for instance, is $641 cheaper at $650 per week compared to a weekly mortgage repayment of $1,290. On the other hand, realestate.com.au reports that the median weekly rent price in Ascot is $755, based on 94 listings from 1 July 2018 – 9 July 2019..
Experts have observed that the overall trend across capital cities is for rent to be more expensive in the suburbs where houses are more affordable, which could be attributed to the difficulties associated with buying. Whilst interest rates are coming down, the report says, the bigger challenge, especially for lower-income families, is saving up for the deposit
New Farm leads the list of suburbs where it is more affordable to rent than to buy at $660 per week, that is a huge difference of $838 when compared to the weekly mortgage repayment of $1,498. Auchenflower, Clayfield, and Bulimba completes the top five list, after New Farm and Ascot.
Whilst most of these suburbs command a median house price of over $1million, experts say that interstate buyers find great value in entering into these markets compared to Sydney and Melbourne.
