Perth property: WA suburbs where it is still cheaper to buy a house than rent – by PerthNow

It is data that will surely rub salt in the wound of WA tenants already facing the most competitive rental market on record — paying a mortgage is cheaper than renting in a quarter of Perth’s suburbs.

Despite consecutive rate hikes, a comprehensive analysis by Domain Research showed Perth and Darwin had the highest proportion of suburbs where it was still cheaper to service a mortgage than pay rent.

According to the new data, there are 62 suburbs within the Perth metropolitan area where the median weekly asking rent exceeds a weekly mortgage repayment for a house, using a 4.93 per cent mortgage rate.

Among them are inner city suburbs, coastal suburbs and many within 25km of the Perth CBD.

Brookdale topped the list as the most affordable, with mortgage repayments an impressive $96.44 cheaper than the median weekly rent for the area.

The southern suburbs of Camillo, Parmelia, Leda and Medina all offer homebuyers savings of more than $70 a week when paying a mortgage instead of rent, placing them in the top five areas where it is currently cheaper to buy.

Meanwhile, the unit market offered even bigger savings, with mortgages for units in Perth, Rivervale, Orelia or Osborne Park more than $100 cheaper than their respective weekly median rents.

The analysis showed interest rate hikes have had a drastic impact though, with 73.5 per cent of Perth suburbs offering cheaper mortgage repayments than rents this time last year compared to 26.2 per cent now.

Domain chief of research and economics Dr Nicola Powell while the proportion of suburbs had declined over the past year, Perth still looked much more inspiring for first homebuyers compared to the other capital cities, especially when taking the tight rental market into account.

“Perth has one of the most competitive rental markets out of all of our capital cities and when you have a look at the availability of vacant rentals, it’s down about 42 per cent year-on-year,” she said.

“There’s a very small pool of rentals available for those trying to secure a lease so I think the tight rental market and escalating costs associated with renting is also going well for that balance between do I rent or buy?”

Elite Finance Australia senior finance broker Justin Abbott said despite consecutive interest rate rises, he was still seeing a lot of young first homebuyers trying to escape the rental market.

“When you sit down and give them this scenario around your payments per week or per month for a home loan compared to what you’re paying in rent, it’s basically the same, if not lower than what they are paying in rent,” he said.

“I have a client this week whose rent’s going up at the end of the month and they want to get out because it’s going be cheaper for them to buy.”

Source - PerthNow