Over 300 Australian suburbs now cheaper to buy than rent

Buying a home is now cheaper than renting in over 300 suburbs across Australia, according to a recent report by Compare the Market. The study highlights significant opportunities for buyers, particularly in Darwin, Perth, and selected areas of other capital cities.

Analysing over 4,000 suburbs, Compare the Market considered median home prices using CoreLogic data, based on a 20% deposit, a 30-year loan term, and an average variable interest rate of 5.99%, excluding additional costs such as strata fees, council rates, and insurance.

Property expert Andrew Winter advises renters to reconsider their housing plans, suggesting units as an effective starting point in home ownership.

“A centrally-located unit can be a practical stepping stone towards property ownership,” Winter noted. “Holding onto the property can also build equity over time.”

Darwin and Perth lead the way

Greater Darwin topped the list with 42 suburbs offering cheaper mortgage repayments compared to renting. Notable suburbs include Driver, Moulden, Johnston, and Rapid Creek. Bakewell, in particular, emerged as Darwin’s most affordable area, with monthly mortgage repayments of $1,346 compared to median rents of $2,171.

Perth closely followed, offering 39 suburbs where home ownership proves more economical. Suburbs such as Burswood, Currambine, Ellenbrook, East Perth, Northbridge, and Shoalwater present unit buyers with monthly repayments ranging from $1,800 to $2,800.

Opportunities in other capitals

Melbourne has 16 suburbs where buying a unit is cheaper than renting, with Carlton being the most affordable suburb, featuring monthly mortgage repayments of $1,749 against monthly rent of $2,386. Travancore, Flemington, and Notting Hill also present attractive opportunities.

In Sydney, only eight suburbs offer better value for buyers compared to renters. Areas such as Warwick Farm, Villawood, Ultimo, Rosehill, Regents Park, Mascot, Liverpool, and Harris Park made the list, although the cost remains relatively high compared to other cities, with Mascot’s monthly mortgage repayment at $4,027.

Brisbane recorded two affordable suburbs—Spring Hill and Goodna. Meanwhile, Adelaide and Hobart each featured just one suburb, Adelaide City and Gagebrook, respectively, as cheaper to buy.

Trends and advice

CoreLogic’s head of research, Eliza Owen, noted the rapid rise in rents over the past five years, highlighting nearly a 40% increase nationally. She emphasised the importance of understanding market trends and timing decisions accordingly.

“As rents stabilise, more markets may tip in favour of buying,” Owen said. “Buyers with sufficient deposits could capitalise on areas where mortgage repayments are cheaper than rental costs, particularly in regions with high temporary or seasonal rental demand.”

Understanding these dynamics could offer significant advantages for prospective homebuyers, ensuring informed decisions that align with market conditions.