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Reductions to the cash rate over recent months could mean that it’s more affordable to pay off a mortgage than to rent a property in some areas, according to Bernie Lewis - but don't get your hopes up if you're in Sydney or Melbourne.
The latest report from RP Data says discounted variable rate mortgages are now 1.5% lower than their peak in 2011, while fixed products are 2.25% lower.
Property prices in the nation's capital cities are now 5.5% lower than when they reached their peak back in October 2010.
However, Simon Johanson, property editor for The Age, says only 48 suburbs in Sydney – and a mere six in Melbourne -are cheaper for aspiring owners to buy a home in than to rent.
Yet, in other parts of the country, Johanson says the recent fall in interest rates and stable house prices has boosted the number of suburbs and country towns where it is cheaper to buy.
“In October, there were 388 localities, this month there were 494, according to RP Data's latest Buy vs. Rent report…If prospective home owners were willing to chip in another $50 per week, that number rose to 1,726 localities.
The analysis compared a suburb’s median weekly rent over the past year with the cost of monthly repayments on a variable 30-year mortgage where the loan-to-value ratio was 90% and interest rate 5.65%.
It did not factor in other costs associated with buying a property or take into consideration capital gains over time.
Brisbane had 58 suburbs where it was cheaper to buy than rent, according to the report.
‘‘Nationally, regional areas dominate the list with 310 suburbs outside of the capital cities showing better payments schedule for buying compared with renting.”
In the capital cities, the type of housing - apartments - made suburbs more affordable.
