Low property prices make buying cheaper

Low property prices make buying cheaper
Date of Publication: Tuesday, 06 November 2012 13:57

Falling property prices are benefiting those who have the means to own their own home, as it has become cheaper to buy than rent across hundreds of Australian suburbs.


Prices fell by 1.4% in October, according to the RP Data Hedonic Index, which is a strong incentive to those who wish to switch to a cheaper alternative.


According to the RP Data Buy Vs. Rent report, the number of suburbs where it is cheaper to buy has leapt by 63% since August.


With falling interest rates and competition from smaller lenders driving the cost of home loans down, those who rent have the ideal opportunity to secure their place on the housing market.


Paying a little extra for a variable rate mortgage, meanwhile, opens the door to well over 1,000 suburbs where buying becomes a practical option.


Inevitably, expensive cities, where property prices are higher, are less accessible for prospective buyers. Only 17 suburbs of Victoria in smaller country towns recorded homes that are cheaper to buy than rent.


But Queensland offered 147 towns and suburbs with property prices that made it cheaper to rent.


To RP Data’s national research director, Tim Lawless, lower property prices and discounted mortgage rates had combined with a tight rental market to persuade many renters into buying.


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


"For many renters, now may be a good time to either re-enter the market or buy their first home."


Bret Clement

Tuesday, 06 November 2012 13:57
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