Sydney suburbs where it’s cheaper to buy a home than rent one
Buying an apartment has become up to $300 cheaper each month than renting one in some Sydney pockets due to recent falls in prices and lower interest rates.
Suburbs where monthly mortgage repayments on a median priced unit were cheaper than average rent were concentrated around Parramatta, the southwest and inner suburbs just south of the CBD.
Housing experts said purchasers were better off than renters in these areas because an oversupply of new apartments was pushing prices down faster than rents.
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This coincided with moves by lenders to slash rates in the wake of two recent cash rate cuts by the Reserve Bank of Australia, providing new opportunities for buyers to get cheaper mortgages.
Unit buyers came out the most ahead of renters in the Parramatta region, including in suburbs Granville, Rosehill, Harris Park and Guildford, according to analysis of CoreLogic sales and rental data.
Median monthly rent in Rosehill was $1950 but typical mortgage repayments on a unit were just under $1650, a difference of nearly $300.
Median monthly rent in the other three suburbs was roughly $40-$50 more expensive than the mortgage repayments on median priced apartments.
Similar savings were on offer in Lakemba, where the average apartment buyer spent $120 per month less than a typical renter, while in nearby Wiley Park the monthly saving was just under $100.
Waterloo apartments were $11 cheaper to own each month than rent.
The analysis compared median monthly rents against the mortgage costs of a median priced home, taking into account a 20 per cent deposit and an average owner occupier rate.
Stamp duty, strata fees and other costs associated with home ownership were not included.
Finder.com.au insights manager Graham Cooke said buyers were getting a boost from a range of market forces, including the opportunity to capitalise on record low interest rates.
“If your home loan rate doesn’t have a ‘3’ or in some cases a ‘2’ in front of it, you could be getting a better deal,” he said.
Some renters have picked up on the savings. Steven Popovich and partner Nymol were originally seeking a new home to rent when they realised they would get better value as buyers.
They purchased a new Shawood home in Sekisui House development The Hermitage in southwest suburb Gledswood Hills for well under $1 million.
“We weren’t actually looking to buy,” Mr Popovich said. “I was making an inquiry on something else and came across this and really liked it. It had all the things we wanted and it felt like a good time to buy.”
Economists have warned that good buying conditions may not last. Preliminary figures showed Greater Sydney’s median property price increased 0.5 per cent over August — the third consecutive month of growth after a nearly two year market downturn.
Realestate.com.au chief economist Nerida Conisbee said the recent rebound was driven by strong buyer activity in the northern beaches, lower north shore and eastern suburbs.
Buyers in these regions were competing for the same houses because stock levels were dwindling.
With greater pressure on prices in these areas, renting remained considerable cheaper than buying. Renting detached houses in suburbs Mosman, Neutral Bay, Manly, Collaroy, Neutral Bay and other prestige areas was more than $4000 cheaper a month than paying down a typical mortgage.
Where it’s cheaper to buy than rent and how much you save each month:
Rosehill $300, Lakemba $120, Wiley Park $97, Harris Park $53, Guildford $37, Granville $27, Waterloo $11, Campbelltown $11