The NAB has revealed the suburbs across Australia where it’s cheaper to buy than rent, and they are surprisingly not exclusively in regional areas.
The rocketing price of houses and units across Australia has been all over the headlines lately. Since September 2020, capital city house prices have risen by 14 per cent, leaving them 12 per cent higher than their pre-COVID-19 (February 2020) level.
But according to data released by the NAB today, there are still plenty of options available for those feeling priced out of the market. Particularly for first home buyers, who have claimed a significant share of the market over the past 12 months.
“Record low interest rates and first home buyer incentives like the First Home Loan Deposit Scheme have driven strong demand,” NAB Executive, Home Ownership, Andy Kerr says. “We have seen through the pandemic, particularly with first home buyers, that flexible and hybrid working is providing more options than they have historically had. Our research shows prospective buyers shift in where they want to buy and demand from first home buyers has been the strongest we’ve seen in a generation.”
That means that more and more Australians, particularly young Australians, are able to take advantage of flexible and hybrid work arrangements to take advantage of lower home prices. These are in both regional Australia and in metro areas where property prices have not risen as much, such as in the outer suburbs. Inner-city apartments have also provided some of the best opportunities for Australians to buy or invest in a home.
“House prices are rising but there’s still plenty of opportunities for Australians to buy their dream home rather than rent it,” says Kerr. “The simple reason for this is the record low rates on offer, with many mortgage rates still coming with a 2 in front of them.”
Where is it cheaper to buy than rent?
In Sydney and Melbourne, it’s still necessary to move a few suburbs further out from the CBD or join the many Australians moving to regional areas. This is due to the recent price growth in Sydney and Melbourne in 2021, although there remain some suburbs where the difference is marginal.
In contrast, all other state and territory capitals have suburbs where it’s still be cheaper to buy than rent. The most significant difference is in the more affordable capital city markets of Perth, Adelaide, and Brisbane.
Top suburbs/postcodes where it’s cheaper to buy than rent:
Housing markets where it is now cheaper to buy than rent are located in the outer suburbs, mainly north and west of Greater Brisbane. Areas such as Logan, Bald Hills, Redbank Plains, Redcliffe and Caboolture all provide opportunities for buying a house over renting.
In contrast, several unit markets that provide opportunities where it is cheaper to buy than rent, are found within a three-kilometre radius of the Brisbane CBD.
Areas such as Brisbane City, Fortitude Valley, Spring Hill, and South Brisbane are all unit markets where it is cheaper to service a mortgage than rent. Outer unit markets such as Chermside, north of Brisbane also present a range of more affordable opportunities.
Popular locations such as Armadale, Greenfields, Port Kennedy, Clarkson and Baldivas all provide opportunity.
Of the unit markets, given the greater affordability across the Greater Perth locality, Perth CBD, East Perth, South Perth, Rivervale, Maylands and Fremantle all are cheaper to buy than rent, based on the median unit value.
More affordable areas, located in the outer north of Adelaide, such as Elizabeth and Salisbury provide greater opportunity to buy rather than rent a house.
Unit markets, providing greater affordability, present themselves in the Adelaide CBD and Glenelg. Additionally, Mawson Lakes also provides buyers with good opportunity.
Top tips for investors: Why smart investors shy away from property hotspots
Given the affordability of housing in Hobart, more housing opportunities present themselves compared to other markets across Australia.
In Hobart, only Glenorchy units provide a cheaper opportunity to buy than rent. While Glenorchy housing also is now cheaper to service a mortgage than rent, areas popular with first home buyers present strong opportunities. Popular locations such as Sorell, Howrah, Moonah and Kingston all see houses now more affordable to buy than rent.
Suburbs such as Zuccoli, Gunn, Durack and Leanyer all see houses cheaper to buy than rent.
Unit markets such as Darwin City, Stuart Park and Larrakeyah, locations where the bulk of unit stock exists still provide opportunities to buy over renting.
Of suburbs that have seen more than 30 sale results in July 2021, there are 40 suburbs within the ACT that provide the opportunity to buy rather than rent a house.
Despite the rapid pace of value growth over the past 12 months, an even split between housing and unit markets was seen.
Of the unit markets, Braddon, Belconnen, Franklin and Kingston, all popular with both first home buyers and investors provide good opportunity. Housing markets such as Kambah, Ngunnawal and Bonner provide more affordable buying solutions over renting.
Areas predominantly in the outer-west and north-western suburbs of Sydney provide opportunities with higher volumes of units. Unit markets such as Campbelltown, Liverpool, Blacktown and Penrith all see units cheaper to service a mortgage rather than renting. The unit market in Bankstown also provides greater opportunities where it is cheaper to buy.
A similar trend to Sydney is noticeable, with suburbs comprised of a higher volumes of units being your best bet. Inner city unit markets such as Carlton, Melbourne CBD, Southbank, Docklands and Abbotsford provide opportunities for buying over renting.
Suburban unit markets such as Bundoora also present more affordable buying opportunities. Melton and Melton South, located on the outskirts of Greater Melbourne, provide some of the more affordable housing options where it is cheaper to buy than rent.
Outside of the capital cities
Areas outside of the major capital cities where it is cheaper to service a mortgage rather than paying rent include, but are not limited to:
- Broken Hill
- Port Macquarie
- Coffs Harbour
- Tweed Heads
- Gold Coast (various suburbs)
- Sunshine Coast (various suburbs)
- Port Hedland
- South Hedland
- Port Augusta
- Mount Gambier
- Murray Bridge
- Port Lincoln
- Victor Harbor
NAB did not release any information on suburbs in the Northern Territory.