Buying ‘beats’ Renting
Low Rates propel surge by Simon Johanson and Sam Rigney, Newcastle Herald
RECORD low interest rates and flat home prices mean the Hunter now boasts at least 11 areas where it is cheaper to buy a house than rent one, according to new figures.
It’s also more economic to buy a unit or apartment in five suburbs, with dozens more Hunter postcodes providing potentially cheaper alternatives to renting once interest rates are taken into account.
People renting Metford, Muswellbrook and Raymond Terrace apartments may be better off buying, the latest RP Data Buy vs Rent report shows.
Tenants in houses in Bellbird, Bolton Point and Boolaroo would have most to gain from becoming homebuyers, it said.
The RP Data figures show there are now 692 towns and suburbs in Australia where homes are cheaper to own than rent, up from 179 at the same time last year.
Historically low interest rates have already prompted a rise in the number of borrowers taking out mortgages.
A rise in home loan approvals in May was a sign the Reserve Bank of Australia’s cuts to official rates were stimulating the housing market, economists say.
Rates have fallen by 100 basis points since June last year.
The Buy vs Rent report suggests prospective house buyers should do their sums to see if they are better off paying a mortgage or a landlord.
National research director Tim Lawless said now may be a good time to consider buying.
‘‘In some suburbs it may actually be cheaper than renting especially where we are seeing evidence of tight rental markets resulting in rental increases and lower home values,’’ he said.
The report analyses the difference between monthly mortgage and rental payments based on the median value of houses and units and median rents.
Property specialists have in the past criticised it for being too simplistic in its comparison of the costs associated with buying and renting.
Suburbs where it is cheaper to buy than rent:
■ Bolton Point
■ Fern Bay
■ Pelaw Main
■ Raymond Terrace
■ Singleton Heights
To see what properties we have available for sale in the Toronto area visit www.raywhitetoronto.com.au