Housing affordability crisis: Buying a unit cheaper than renting in only 11pc of suburbs Australia-wide

Already a subscriber?The number of suburbs where owning a home – a house or an apartment – is cheaper than renting has dwindled to just a small proportion in the past two years as the impact of soaring prices outweighs the cost of higher rents, according to CoreLogic data.have slightly more options, but even for aspiring apartment buyers, the portion of suburbs where owning one is cheaper than renting has also shrunk substantially in the past two years.

Eliza Owen, CoreLogic head of research, said opportunities for buyers had dwindled dramatically since interest rates started rising around two years ago and would likely persist in the near- to medium-term.Just before interest rates started rising in May 2022, buying was cheaper than renting across 818 suburbs, or 30 per cent of all house markets nationwide. In the unit market, 48 per cent of all suburbs were cheaper for buyers.

The cost of paying a mortgage on a median-priced house nationwide increased by $157 a week to $949 in the past 12 months. By comparison, the average rent for a similar house rose by $49 a week to $633 in the past year.“That combination of higher interest rates and rising prices is pushing new mortgage costs higher, so for prospective buyers, it would still be cheaper to rent across both houses and units despite those increased rent costs,” Ms Owen said.

In the unit market, only five Sydney suburbs, or 1.6 per cent of 309 suburbs analysed, are cheaper to buy than rent, while in Melbourne, 2.1 per cent, or five out of 243, favour buyers. These include Goodna, Spring Hill and Fortitude Valley in Brisbane, and Perth’s Orelia, Victoria Park, Northbridge, Ascot and Wembley.Across Canberra, buying is cheaper than renting in only four suburbs – Braddon, Reid, Phillip and Narrabundah, but all unit markets were more expensive to buy than rent in Hobart.first home buyersThe time it takes to save a 20 per cent deposit has blown out to 10.

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