The dream of homeownership, with its hefty mortgages and long-term commitment, isn’t always the only path to a fulfilling life in Australia’s vibrant cities – here are the suburbs where it’s cheaper to rent than buy.
In the wake of the pandemic, the Australian real estate landscape has undergone a dramatic transformation.
A year ago, a majority of dwellings across the nation presented a more cost-effective scenario for buying over renting – however, following a period of record home price growth, the scales have tipped in favour of renting in many areas.
Today, nearly three-quarters of Australian properties are now more financially viable to rent than to buy, marking a significant shift in housing affordability and investment strategy.
PropTrack Economic Analyst Megan Lieu says this dramatic change is highlighted by the latest PropTrack Buy or Rent Report, which reveals a stark decrease in the percentage of suburbs where buying a 3-bedroom house is cheaper than renting one.
“The new PropTrack Buy or Rent report shows only 31% of suburbs in the country with 3-bedroom houses are currently cheaper to buy than rent,” she explains.
“This is a massive drop from 59% just one year ago.”
What’s driving the trend?
The PropTrack Rental Affordability Index reveals that for those not yet ready to enter the home ownership market, there are growing numbers of suburbs in Sydney, Melbourne, Brisbane, and beyond where renting can be the significantly smarter financial choice.
The driving force behind this trend is multifaceted.
The anticipation of higher interest rates has made buying less attractive, alongside a rise in prices which have grown more than twice the rate of rents.
This has created a market where more suburbs are becoming cheaper to rent than to buy.
To delve deeper into this trend, the report examined suburbs across Australia, identifying those with the largest monthly price difference between renting and buying.
This differential represents the potential monthly savings for renters over buyers, based on a 10-year period, with calculations including a mortgage rate of 4.62%, an inflation rate of 2.5%, and an annual increase of 3% in both rent and housing prices.
The perks of renting
Living the good renting life not only offers a more affordable way to enjoy the perks of cosmopolitan living but also provides the flexibility to adapt to the changing real estate landscape.
It allows the flexibility of exploring different areas, amenities, and the community without the long-term commitment of a mortgage, property maintenance and other home ownership costs.
So if you are considering a move, don’t just find a cost effective suburb, but an effective mover, like Budget Trucks, who are helping movers live well for less.
With a range of vehicles to suit any size move, it’s an economical solution to start your rental journey on the right foot.
Whether you’re moving across the city or interstate, renting a truck can significantly reduce your relocation costs, allowing you to allocate more of your budget to enjoying your new suburb.
So, where are these suburbs where you can live the good renting life?
Capital city suburbs where it’s cheaper to rent than buy
Sydney
in Sydney, choosing to rent a 3-bedroom house in Watsons Bay could save individuals a touch over $25,000 a month compared to buying.
The savings extend to units as well.
Renters of 2-bedroom apartments in Sydney’s Roseville Chase could see savings of $10,000 monthly.
Melbourne
In Melbourne, house renters in Main Ridge could see monthly savings of just shy of $18,000.
It’s a similar story in the seaside suburb of Portsea, where renters of 2-bedroom units could save as much as $7,000 a month compared to a mortgage.
Brisbane
In Brisbane, renting a 3-bedroom home in Teneriffe will deliver nearly $5,300 in monthly savings, compared to the cost of buying, while units in Shorncliffe offer renters a $1,000 monthly saving.
Perth
The trend continues in Western Australia, where Perth’s Peppermint Grove sees renters pocketing almost $10,000 in monthly savings, while units in Dalkeith deliver $1400 in savings.
Hobart
In Hobart’s Rosny Park, renters could save $6,000 a month on a 3-bedroom house. Renting a unit in Taroona offers a saving of just over $1,100 per month.
Adelaide
Renters could save nearly $5,200 a month by renting a 3-bedroom house in Adelaide’s Leabrook, while renting a two bedroom unit in North Brighton could deliver savings of up to $2,000.
Darwin
A 3-bedroom home in Brinkin, Darwin, will save renters a little over $2,200 per month.
Bucking the trend, however, in Darwin buying a 2-bedroom unit will actually save you just over $200 a month, making it the only Aussie state where units are cheaper to buy than rent.
Canberra
Franklin, in Canberra, offers renters an almost $8,000 savings boon compared to buying a 3-bedroom house, while a 2-bedroom unit in Denman Prospect will net $1,700 in savings.
