Buying a house is cheaper than renting a third of the country

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More than a third of Australian real estate is cheaper to buy than rent, and loan payments are lower than rent in almost all parts of the Northern Territory.

A new report from CoreLogic found that paying off mortgages is now cheaper than paying rent at just over 36% of Australian homes due to record low interest rates.

However, he also noted that there are “striking differences” in the cost of housing across the country: mortgage payments are cheaper than rent in two-thirds of Australia’s regions.

Nearly 97 percent of real estate in the regional Northern Territory was cheaper to buy than rent, followed by 86.5 percent of homes in Darwin.

A spreadsheet from CoreLogic that compares the cost of paying off a mortgage versus renting in Australia.
CoreLogic found that mortgage payments were cheaper than rent in 60% of Australia’s regions.(

CoreLogic included

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Eliza Owen, head of research at CoreLogic, said record low interest rates made buying in some areas cheaper than renting.

“The increase in the number of areas where mortgage servicing is cheaper than paying rent across Australia, compared to pre-COVID analysis, is a reflection of much lower interest rates on mortgages since COVID-19 began,” she said. said.

Photo of Eliza Owen with blurred background
Eliza Owen of CoreLogic said most regional properties are cheaper to buy than rent, despite the recent spike in prices.(

ABC News

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CoreLogic has estimated mortgage payments for individual properties and compared them with rental estimates.

Renting is still cheaper than buying in major capitals

In the South Australia and Western Australia regions, it was cheaper to pay mortgages than to pay rent on eight out of 10 properties.

In contrast, just under 5% of loan payments in Sydney were cheaper than rent payments, and less than 8% in Melbourne.

Regional New South Wales was more balanced, with just over half of the properties being cheaper to rent.

Mortgage payments were cheaper than renting eight out of 10 homes in Logan on the outskirts of Brisbane and Ipswich in regional Queensland and nearly nine out of 10 homes in far west NSW, including Cobar.

In the Western Australian outback, nearly 96% of homes were cheaper to buy than rent.

Ms Owen said that lower interest costs have not in all cases resulted in lower mortgage servicing costs compared to rent.

“This is especially true in the case of Sydney, where real estate values ​​rose markedly against the backdrop of low interest rates, which led to an increase in loan obligations (loan amount) and outstripping rent growth.”

Ms Owen added that just because the cost of mortgages is lower than the rent in the area does not mean that people necessarily want to buy there.

For example, in the regional Northern Territory and sparsely populated areas of Western Australia, rental rates tend to be higher because housing is in high demand from temporary workers such as miners arriving and departing.

Record low interest rates, home construction subsidies and the closure of international borders have resulted in record high house prices.

But the proliferation of work from home due to coronavirus-related restrictions has led to an increase in the number of people buying homes or moving to regional areas, which has also led to higher rents.

Last month CoreLogic reports that property values ​​jumped nearly 14% year on year in June.

Housing construction was at an all-time high in the March quarter, according to the Statistics Office.



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