Melbourne, Carlton, Kerang and Morwell: Victorian hotspots where it’s cheaper to buy than rent | Compare the Market

3 days ago 5

Houses in Kerang can often be bought with monthly mortgage repayments less than the cost of tenting in the area. No. 1 Cullen St, Kerang, is currently for sale.

Victorian tenants could save as much as $700 a month if they bought a home rather than rented in some parts of Victoria.

Compare the Market research revealed renters in Melbourne’s CBD were the worst off, forgoing a whopping $688 leasing rather than buying as the median monthly rental value was $2882 compared to typical monthly repayments of $2193 in the area.

And there are 15 suburbs in Victoria where it is cheaper to buy a house than rent one.

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But none of them were in the metropolitan region, leaving would-be buyers with a rental budget to look at places like Morwell, Moe and Ararat.

But for units, the price comparison platform determined there were 16 areas in Greater Melbourne where you would be better off buying than renting.

An apartment 1112/65 Dudley St, West Melbourne, is among those listed in the nation’s only capital city centre where it can be cheaper to pay off a mortgage on a unit than a lease.

The two-bedroom apartment is listed for $470,000-$505,000 — West Melbourne’s median unit price is about $489,000.

Many of those suburbs were within 5kms of the CBD including Carlton, Travancore and Flemington where homebuyers could be $647 a month better off in an apartment.

But further out, bigger units could stack up in Roxburgh Park, Clyde North and Broadmeadows, with potential savings of $18-$123 a month.

With interest rates widely predicted to fall further this year, owning a home and paying a mortgage could soon be even more affordable compared to renting on monthly costs.

Compare the Market property expert Andrew Winter said Victoria’s housing market had lagged behind the rest of the nation in property capital growth in recent years, whereas rent prices had not.

Mr Winter said this had enabled a unique situation to arise where there were pockets across the state that had become cheaper to pay off monthly mortgage repayments than to pay rent.

He noted that Melbourne’s CBD making the list was unique across Australia, making the opportunity there particularly noteworthy.

56 Church St, Morwell, is listed for sale in a suburb where it can be cheaper to pay off a mortgage than rent.

The three-bedroom house is listed for $350,000 and Morwell’s median house price is about $330,000.

Mr Winter added that it was a good time to buy in Victoria, especially a unit, because of decreasing interest rates and a lack of new stock coming onto the market because of high building costs.

Building approvals data released this week shows that while 4417 new homes were approved across the state in January, only about 1800 of those were units – a figure that had declined from December, 2024.

However, Mr Winter said confidence was returning to the market since the Reserve Bank slashed the nation’s cash rate, which underpins home loan costs, by 0.25 percentage points to 4.10 per cent in February.

“We’ve heard that more potential buyers are showing up at open homes in light of last month’s cash rate decision,” he said.

“If owning a home is part of your long-term plan, and you have a deposit saved, you might find it’s worth paying a bit more to have a little slice of Australia to call your own.”

Tenants Victoria chief executive Jennifer Beveridge said many renters hoped to buy their own home one day. Picture: Andrew Henshaw.

Tenants Victoria chief executive Jennifer Beveridge said many renters hoped to buy their own home at some stage.

“But with rents so high, saving up a deposit takes so long that the dream can feel out of reach,” Ms Beveridge said.

“There are structural issues that are really demotivating for potential first-home buyers.

“While we wait for more properties to be built, we need more attention on rental affordability in the short term.”

She added that they were calling for a rent fairness formula to regulate rental costs and stop rapid increases in the cost of being a tenant, so that those who did opt to lease a home were able to continue saving for their future – and potentially to buy a home.

However, Ms Beveridge said there were some early signs 2024 could be a better year for renters, with cost increases finally slowing.