The spike in rental prices has pushed a lot more Australians towards considering buying their own home, as in numerous suburbs, the cost of home loan repayments now falls below the median rent across Australia.
Recent data highlights that in many Australian affordable suburbs, properties are priced in such a way that buyers can enter the housing market and manage their mortgage for less than what they would typically pay in rent each week. This trend persists even amidst the backdrop of soaring property prices and climbing interest rates, underscoring a strong desire among many to shift from renting to owning.
The median rent in Australia was pegged at $550 over the last year. Given this scenario, if a buyer puts down a 20% deposit and secures a loan at an interest rate of 6.24% — the current average rate for new loans as noted by the RBA — they would need to find a property valued at under $447,000 for their weekly repayments to be less than $550.
According to data from PropTrack, across Australia, there are 340 affordable suburbs where the median house prices sit below the $447,000 mark, and 261 suburbs where median unit prices are within this range.
In Sydney, the $550 per week budget might not stretch to a house, but there’s a good selection of suburbs, especially in Sydney’s southwest, where units are within financial reach.
While Melbourne might see the $550 weekly budget falling short for houses, there are 18 suburbs, largely in the city’s west and north, where units are an affordable option. Talk to a Melbourne buyers agent to learn more about these suburbs.
In Brisbane, those looking to buy a house with repayments under $550 per week will need to look towards the city’s west. However, unit seekers are in luck, particularly in the south of Brisbane.
Adelaide showcases all its suburbs with median house prices below $447,000 in the city’s north, presenting a more cost-effective option than renting and fulfilling the Australian dream of homeownership.
Perth offers a broader selection of options for homes with repayments under $550 weekly than other capital cities, with affordable suburbs located in the southeast, southwest, and northeast.
Hobart presents only four suburbs where, based on median prices, repayments would sit below the $550 weekly mark.
In suburbs where entering the market as a buyer means mortgage repayments are lower than average rent, the demand for purchasing is likely to rise, potentially driving up property prices further.
For those looking to invest wisely, these suburbs represent an excellent starting point.
If you also want to learn about other key factors in identifying booming locations, read this article.
