Where is it cheaper to buy property than rent in Australia?

Finance Jul 26, 2021

4 min read


New analysis completed by CoreLogic has revealed that it is becoming increasingly cheaper to repay a home loan than it is to rent in certain parts of the country. Nationally, 1 in 3 properties are now cheaper to own than rent.

Over 36% of properties nationwide are cheaper to own

It is now cheaper to pay a mortgage in 36.3% of Australian properties compared to 33.9% in February 2020.

This is in spite of the fact that property prices around the country have been increasing dramatically. Attributed to record low interest rates, the flow on effect has made mortgage repayments incredibly low coupled with some very good government first home buyer incentives.

Regional Northern Territory is the most affordable region to buy in when compared to the renting equivalent. 163 hectares in Coomalie Creek for $400k – what a steal!

What about capital cities?

Unsurprisingly, Sydney and Melbourne are the exceptions with it only cheaper to pay a mortgage in 7.3% of Melbourne properties and 4.9% of Sydney properties. These are historically very tough property markets to enter, and this hasn’t changed recently.

If anything, buying these two capital cities has become even more expensive throughout 2021. This is due to the record prices in these cities, mitigating any benefit from the lower interest rates.

Contrast this with Darwin which is very affordable as far as capital cities go, with 86.5% of properties cheaper to buy than rent in the top end capital. Perth and Brisbane are also far more affordable to buy in, with 59.6% and 55.3% of properties respectively.

Could you be in a position to buy now?

It’s a timely reminder to review your living situation to see if you could be in a position to purchase. Chatting with a broker can help you to understand your borrowing capacity and what repayments might look like based on the amount you can borrow.

One thing to note is that the analysis assumes purchasers have a 20% deposit. Historically, many potential buyers are able to afford the repayments but haven’t managed to save the required deposit. Luckily, there are some great government incentives for first home buyers whether it be through the First Home Loan Deposit Scheme or discounts on stamp duty payable.

It’s worth getting in touch with a broker to run the numbers and look at whether it makes financial sense for you to buy rather than continue to rent! Even if it means moving to outback NT.