Newspaper article The Chronicle (Toowoomba, Australia)

Want to Save Money on Housing?

Newspaper article The Chronicle (Toowoomba, Australia)

Want to Save Money on Housing?

Article excerpt

RECORD-low interest rates and flat home prices have seen an almost 290 per cent jump in the number of suburbs in which it's cheaper to buy a house than rent one.

At the same time as historically-low interest rates are prompting a rising number of borrowers to take out a mortgage, new figures show there are now 692 towns and suburbs in which homes are cheaper to own than rent, up from 179 at the same time last year.

A rise in home loan approvals in May was a sign the Reserve Bank of Australia's cuts to official rates were stimulating the housing market, economists say.

Rates have fallen by 100 basis points to 2.75 per cent since June last year.

Buy vs Rent

The latest RP Data Buy vs. Rent report suggests prospective house buyers would be doing their sums to determine if they were better off paying a mortgage or their landlord.

National research director Tim Lawless said it now may be a good time to consider buying.

"In some suburbs it may actually be cheaper than renting especially where we are seeing evidence of tight rental markets resulting in rental increases and lower home values," he said.

The report analyses the difference between monthly mortgage and rental payments based on the median value of houses and units and median rents.

Property specialists have in the past criticised the RP Data report as being too simplistic a comparison of the costs associated with buying and renting.

In June last year there were 179 suburbs where buyers were better off servicing the principal and interest on a variable mortgage loan. Now there were 692.

Queensland, with 242 suburbs, and NSW with 193 offered the most opportunities to buyers.

Victoria (45) and Canberra (6) trailed behind the other states with Western Australia (78), Tasmania (54) and South Australia (45) taking the middle ground.

Melbourne had only two suburbs that were cheaper. …

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