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Top Australian suburbs where it is cheaper to buy than rent a home

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Despite house prices surging at a decade-high pace, it is still cheaper to buy than rent more than half the homes across Australia, a recent analysis by property website Realestate.com.au has shown.

The group conducted a 10-year analysis of all the expenses associated with buying and renting based on current house prices and a moderate price growth of 3% annually and found that 56.8% of all dwellings in the country would cost less to purchase than to rent.

The study also forecast that over the next decade, it would be less expensive to buy more than half, or 51.2%, of houses and about three-fourths, or 72.7%, of units nationwide compared to renting.

Paul Ryan, economist at Realestate.com.au, attributed the favourable buying conditions to the current historic-low interest rates.

“Interest rates can currently be fixed below 2% per year and the Reserve Bank of Australia has committed to maintaining low interest rates until at least 2024,” he wrote in the report. “This certainty that mortgage costs are not going to increase rapidly provides comfort to buyers borrowing larger amounts.”

According to the analysis, buying conditions were most favourable outside New South Wales and Victoria – the country’s most populous states. Figures showed that 81.2% of houses and 98.9% of units outside of these states cost less to buy than rent. These include dwellings located on the outskirts of capital cities Adelaide, Brisbane, Hobart, and Perth, and almost all of regional Australia.

“Affordability is driving demand and, as a result, it is likely we will continue to see regional price growth,” Ryan wrote.

However, the findings were also based on the assumption that buyers already have a 20% deposit, which Ryan admitted was the biggest barrier to homeownership, particularly for first home buyers.

“Many would-be buyers can already afford loan repayments, but struggle to save a deposit while renting,” he added. “Continued price growth may cause additional concern for many in this position.”

Top suburbs where it is cheaper to buy than rent

Here is a breakdown of the top suburbs where buying a home is less expensive than renting, according to Realestate.com.au’s inaugural Buy or Rent Report. The study compared the prices of a three-bedroom house and a two-bedroom unit across Australia’s capital cities.

Sydney

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

Tacoma

$492,782

$435

$578

Rocky Point

$565,283

$450

$388

Warragamba

$532,205

$425

$366

Hamlyn Terrace

$589,461

$455

$338

Warnervale

$644,367

$395

$327

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

Kangy Angy

$198,823

$340

$1,206

Stanhope Gardens

$336,432

$425

$1,148

Vineyard

$252,080

$355

$1,063

Warragamba

$277,249

$353

$973

Banksmeadow

$603,909

$580

$960

Source: REA Insights Buy or Rent Report, April 2021

Melbourne

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

Waterford Park

$379,914

$330

$472

Rockbank

$476,683

$370

$311

Mickleham

$491,077

$380

$289

Millgrove

$457,213

$350

$278

Wollert

$511,142

$390

$266

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

Frankston North

$419,269

$415

$794

Bangholme

$375,489

$368

$682

Williams Landing

$388,875

$370

$658

Woori Yallock

$363,027

$350

$622

Burnside Heights

$394,018

$363

$563

Source: REA Insights Buy or Rent Report, April 2021

Brisbane

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

Kilcoy

$299,474

$360

$1,014

Lockrose

$267,298

$335

$977

Waterford

$359,110

$375

$890

Toogoolawah

$256,158

$310

$872

Logan Reserve

$372,367

$385

$870

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

Brisbane City

$508,928

$525

$1,162

Woolloongabba

$428,708

$470

$1,156

Kangaroo Point

$489,224

$505

$1,125

Eight Mile Plains

$372,538

$430

$1,122

Dutton Park

$433,155

$470

$1,119

Source: REA Insights Buy or Rent Report, April 2021

Adelaide

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

Elizabeth South

$168,814

$245

$772

Gawler West

$235,200

$290

$753

Munno Para

$263,004

$310

$748

Elizabeth Park

$223,111

$280

$736

Wingfield

$302,639

$335

$730

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

Glanville

$242,210

$340

$994

Walkerville

$368,493

$420

$967

Sturt

$226,139

$318

$946

Happy Valley

$209,559

$298

$512

Adelaide

$419,024

$445

$908

Source: REA Insights Buy or Rent Report, April 2021

Perth

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

Hilbert

$287,256

$330

$811

Meadow Springs

$360,369

$370

$730

Lakelands

$324,126

$340

$714

Carramar

$449,931

$420

$693

Stratton

$293,819

$315

$689

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

Wanneroo

$175,417

$355

$1,363

Merriwa

$219,695

$340

$1,135

Coodanup

$123,255

$275

$1,110

Wattleup

$260,214

$365

$1,084

Swanbourne

$736,240

$690

$1,060

Source: REA Insights Buy or Rent Report, April 2021

Hobart

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

Clarendon Vale

$285,250

$365

$993

Gagebrook

$265,480

$340

$930

Risdon Vale

$347,229

$385

$874

Herdsmans Cove

$283,349

$340

$853

Chigwell

$376,246

$400

$842

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

Glebe

$367,388

$495

$1,413

Herdsmans Cove

$225,979

$325

$1,000

Mornington

$356,149

$405

$947

Bridgewater

$236,351

$315

$906

Rokeby

$357,914

$395

$891

Source: REA Insights Buy or Rent Report, April 2021

Darwin

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

Zuccoli

$426,905

$550

$1,449

Muirhead

$498,843

$580

$1,315

The Narrows

$412,274

$515

$1,295

Woolner

$589,819

$603

$1,069

Lyons

$628,005

$605

$924

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

Darwin City

$363,492

$485

$1,336

Anula

$196,684

$340

$1,204

Rosebery

$260,038

$380

$1,154

Wagaman

$166,040

$310

$1,151

Malak

$194,535

$330

$1,148

Source: REA Insights Buy or Rent Report, April 2021

Canberra

3-bedroom house

Suburb

AVM median price

AVM median rental

Monthly price differential

Coombs

$591,756

$565

$1,001

Denman Prospect

$588,355

$555

$984

Moncrieff

$598,754

$535

$833

Casey

$607,581

$525

$738

Throsby

$692,715

$580

$696

2-bedroom unit

Suburb

AVM median price

AVM median rental

Monthly price differential

City

$601,111

$685

$1,634

Reid

$441,282

$540

$1,437

Turner

$531,500

$585

$1,346

Dickson

$501,017

$560

$1,323

Crace

$368,164

$460

$1,291

Source: REA Insights Buy or Rent Report, April 2021

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