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Just 27% of homes across Australia are cheaper to buy than rent, according to PropTrack’s latest Buy or Rent Report.
It reveals just over a quarter of properties are more cost-effective to buy, a nosedive from this time last year when a little more than half of all homes were cheaper to own than rent.
Soaring home prices and a 75-basis-point increase in interests rates have made buying a less attractive option.
The data shows that conditions differ significantly depending on property type and location.
PropTrack economist and report author Paul Ryan (pictured) said buying conditions were more favourable outside NSW and Victoria.
He said more than half of dwellings in Queensland, Western Australia and the Northern Territory are estimated to be cheaper to buy than rent, while less than 10% of dwellings in NSW, Victoria and the ACT appear cheaper to buy at current prices.
In NSW, it is cheaper to buy than rent only 9% of properties, with price rises across Sydney making renting houses cheaper than buying across the city.
In Victoria, it is cheaper to buy than rent only 7% of properties, although pockets in the north, east, and west of the CBD provide affordable buyer options.
By contrast, 62% of properties in WA are cheaper to buy than rent. Queensland (51%), Tasmania (41%), South Australia (34%), and the ACT (29%) likewise recorded two-digit figures counting units cheaper to buy than rent.
Ryan said the PropTrack report found that the shift towards more affordable renting costs for median-priced homes than buying coincided with the slowdown in price growth across Australia.
The report estimates than more than a third of units across the country will be cheaper to buy than rent over the next decade.
PropTrack is the property data analysis arm of REA Group, which also owns broker franchise networks Mortgage Choice and Smartline.
