Buy or rent?
Hi and welcome to 2013 from everyone at loans.com.au!
If you are tired of renting and want to make the plunge into the property market, then this blog may be of interest to you.
We all know that the rising cost of renting a home in Australia is rising. But a silver lining to this problem might be the narrowing gap between the cost of renting a property and owning it.
The number of suburbs in Australia where it is cheaper to pay off a mortgage than it is to pay rent has jumped by 27% in the past three months alone.
Right now there are about 500 suburbs where it is cheaper to buy than to rent in Australia. And if you can afford to spend just $50 more a week on top of your usual rent then that number doubles.
There are opportunities in regional Australia as well as the capital cities. However if you are renting in or near a CBD then you should really consider how much rent you are paying and how much you could save buy buying a property. It could save you money and get you a crucial foot on the property ladder.
For people interested in taking an interest-free loan, there are a couple of thousand suburbs across Australia where that could save you money, but please seek advice before doing this sort of mortgage (or any property purchase for that matter).
Of the major cities, Brisbane has the most suburbs where it is cheaper to buy than to rent, followed by Sydney and Adelaide.
Melbourne has the least number of suburbs, but it has not had the rental spikes that Sydney and Brisbane have.
Property analyst RP Data says the gap between renting and buying has closed across Australia due to falling property prices and rising rents. They say housing market conditions improved after the Reserve Bank of Australia reduced the official cash rate to 3% or the equivalent of the “emergency lows” that were implemented in 2009.
Lower mortgage interest rates have put buying a home within people’s reach, but always be sure to take into consideration how much you can afford to pay if interest rates increase.
Finally RP Data says a housing market recovery is underway, but capital city “buyers remain in the driver’s seat”.
Check out Brisbane, Melbourne and Hobart where prices are more than 10% below their peak.
By Marie Mortimer. You can follow Marie on Google+
Image credit: davidlat