Where it's cheaper to buy property than rent across Australia

It is currently cheaper to buy a home than pay rent in over a third of all the Australian suburbs for which there are reliable statistics, a landmark Domain study has found.

Even more shocking is the fact that, in some cases, those mortgage repayments can add up to less than half the weekly rent.

And while buying is cheaper mostly in regional areas of the country, and on the outskirts of cities, some of the biggest bargains are found in some desirable areas, such as Mollymook Beach on the south coast of NSW and Portland on Victoria’s southwest coast.

“There are now almost 37 per cent of suburbs where it’s cheaper to buy than rent, which surprised me too,” said Domain senior research analyst Dr Nicola Powell. “It is so encouraging for first-home buyers wanting to get into the property market.

“It’s also good news for investors who are looking for positively geared property. They’ll be receiving more rent than it’s costing them actually to own the property.”

• See where in your city it’s cheaper to buy than rent

The modelling was based on median sales and rent data for 2020, and assumed homeowners were paying a rate of 2.48 per cent on a principal and interest loan and had already saved a 20 per cent deposit. It did not factor in housing costs such as stamp duty, council rates and maintenance.

The nation’s top bargain for buying a home – over paying rent – is, surprisingly, at Mollymook Beach where the average weekly mortgage repayment is just $645 as against the median weekly rent of $1260, representing a saving of $615.

That’s a bonus only a whisper above that if you were buying in Middleton on South Australia’s Fleurieu Peninsula, where a mortgage would generally set you back by $466 a week as against $1050 in rent.

The biggest difference between a mortgage and a rent in Queensland occurs in coal-mining town Moranbah in the Isaac region, where average mortgage payments are $231 as against rents of $420. In Victoria, Portland has the greatest gap – you could save $107 a week if you chose to buy a home ($243 a week), as against renting one ($350).

So is buying a property an even smarter financial decision than we’ve always thought?

“It certainly is,” said buyers’ agent Chris Gray, CEO of Your Empire. “It shows that, even if you’re thinking about renting, you should still compare the rent to the cost of buying in an area, and you may be pleasantly surprised.

“In addition, I always believe that rent money is dead money and, with buying, property prices can rise – they say five to 10 per cent this year – so that can be big capital growth. This study shows how now is a good time to get off the fence and into the market.”

In NSW, as well as on the coast and in the country, it’s also a lot cheaper to buy than rent in a number of suburbs of Newcastle, such as Rutherford, where you can save $42 if you buy rather than rent, and Lake Illawarra in Wollongong where you’ll have an extra $17 in your pocket.

In Sydney itself, there’s not a single suburb where rents are cheaper than mortgages, although the difference is only $10 a week in Austral in the south-west, $37 in Oxley Park in the west and $62 in Hazelbrook in the Blue Mountains.

In the south, the smallest gap is $174 in Engadine on the Northern Beaches, $193 in Warriewood on the Upper North Shore and $193 in Marsfield. The city and east’s slimmest gap is $267 in Botany.

Mortgages monster rents in Bellevue Hill by the biggest amount in the country: $2782 a week.

In Victoria, it’s a similar story, with Portland topping the savings for owners over renters. Irymple in Mildura in the north-west offers a saving of $83 and Bairnsdale in East Gippsland gives buyers $80 extra.

In Geelong’s St Albans Park, an average mortgage repayment is $6 a week less than the rent, but, as in Sydney, there isn’t anywhere in Melbourne where it’s cheaper to rent.

The slimmest gaps between mortgages and rents are: in the west, Melton ($8); in the south-east, Frankston North ($55); in the north, Kalkallo ($70); and the north-east, Epping ($115).

In the outer east, Kilsyth costs $126 more to have a mortgage, in the inner south, Clayton south is $170 extra, in the inner urban, North Melbourne costs $348 more, and in the inner east, Box Hill north costs $449 more. Mortgage-payers in Toorak are the worst off in Victoria when compared to renters, paying an additional $2461 a week.

Queensland has many areas where it’s much cheaper to pay off a mortgage than pay rent. In the built-up areas, Townsville’s Rasmussen offers a $141 saving, the Brisbane suburb of Woodridge a $135 saving and Manoora in Cairns $134 a week.

It can be cheaper to buy on the Gold Coast, too, particularly in Molendinar in the north, where the saving is $75. Even on the hot Sunshine Coast, in Baringa it is $69 cheaper to buy than to rent.

In Brisbane’s northern suburbs, you can find suburbs where it’s cheaper to buy, too, such as Kallangur, where doing so can save you $29.

Sunshine Beach on the Sunshine Coast is the most expensive place to buy in Queensland rather than rent, where a mortgage costs $835 a week more.

You can hear Sue Williams chatting about Domain stories and apartment related issues every week in the Flat Chat Wrap podcast.