If you thought that buying a property in today’s market was impossible, you might be surprised to find that it can be cheaper than renting in some areas of the country. According to an analysis by Real Estate Australia, it is estimated that 27% of homes across the country are cheaper to buy than rent.
This figure varies within each state and territory but more than 50% of dwellings in Queensland, the Northern Territory and Western Australia are cheaper to buy than rent. Encouragingly, only 7% of dwellings in Victoria are more expensive to rent than buy.
Location plays a large role in this of course, as homes in regional areas and smaller capitals are more affordable; whereas properties within major cities such as Melbourne and Sydney are more expensive to buy, making renting a more viable option.
Purchasing a home is a life-long aspiration for many Aussies. Not only does property ownership provide you with freedom, stability and personalisation options that are rarely possible with a rental, like decorating and renovating, but property also tends to increase in value over time, allowing you to use equity to invest in your current home or to purchase a second.
According to CoreLogic, throughout the six distinct cycles of growth and decline in Australian property values over the past 30 years, home prices have increased 382% – or an average of 5.4% per year since 1992.
However, property ownership has its drawbacks, such as regular maintenance, council rates, and mortgage repayments. If you can see past these, buying a house is a rewarding achievement. Depending on your personal situation and property goals, buying a home in a more affordable area outside of major cities is actually still a realistic goal for many Australians.
Even if buying a property can be cheaper than renting in some areas, renting offers an affordable and flexible living situation for a large portion of the population. Renting allows you to live in a location you may be unable to afford to purchase and provides flexibility to move around if needed.
However, current low vacancy rates in some areas of the country will push rental prices higher as international students and backpackers return to Australia and place added demand on the market. This is beneficial for property investors who will receive higher rental income and better-quality tenants, but places unwelcome pressure on tenants across the country who are in the rental market.
Renting versus buying is dependent upon location and your individual situation, which determines the suitability of each option. While rising house values and increasing interest rates have made buying less attractive than renting in some areas, increased rental demand has caused low vacancy rates, pushing rents higher and making the rental search more difficult.
When it comes to buying, a property outside of major centres will likely be more affordable, but if lifestyle is your priority, renting a unit in the city may be the best option.
If you are ready to take the leap and purchase the home of your dreams or secure that rental, visit https://www.firstnational.com.au/offices to get in touch with an office today.