New modelling revealed the suburbs where the cost of renting is expected to outstrip the cost of mortgage repayments in the shortest time.
Geelong suburbs where it makes most sense for people to escape the rent cycle and step onto the property ladder in 2026 have been revealed.
New PropTrack modelling shows the suburbs where renting is expected to outstrip the cost of monthly mortgage repayments in typical homes, shrinking the monthly payment gap for people.
At today’s average lender’s rate of 5.75 per cent, a typical rent for a house in Geelong of $2240 a month sits about $1200 below monthly mortgage repayments of roughly $3300.
That gap is forecast to close in 2035.
RELATED: Third act for historic Newtown mansion draws $3.5m+ sale
Waterfront estate with golf course seeks $8.5m+
Geelong residents are sharing in an $800k windfall
If rates lift to 6.1 per cent, monthly repayments rise to about $3450 and the crossover slides to 2036.
PropTrack’s data assumed a suburb’s median purchase price, with a 20 per cent deposit on a 30-year principal and interest loan.
The modelling for individual suburbs in Geelong shows the crossover for entry-level areas can be as little as two years for people purchasing a unit and five years for buyers of houses.
The data revealed it would take until 2041 for rents to outstrip mortgage repayments in Fyansford, and 2040 in areas such as Newtown, Manifold Heights and Barwon Heads.
In suburbs mid-priced such as East Geelong, St Albans Park, North Geelong and Belmont, the gap between rents and mortgage repayments closes in around a decade.
Areas where the gap for houses is less than six years include Norlane, Whittington, Corio and Lara.
The gap between rents and mortgage payments crosses over after 7 years in Thomson, and 10 years in East Geelong.
But its lowest for units in Whittington, Lara, Norlane and Geelong West.
PropTrack economist Anne Flaherty said the relationship between rents and property values tended to look very different in cheaper markets to the most expensive areas.
“In more affordable areas the rent relative to the value of the property is typically higher,” she said.
“That means the gap between mortgage costs and rental income can close more quickly.”
Ray White economist Nerida Conisbee said affordability was at its weakest level in years, with deposits taking longer to build and mortgage serviceability stretching household budgets.
“For many buyers the deposit is the biggest roadblock. Rents are rising and saving is getting tougher,” Ms Conisbee said.
She said demand had shifted toward entry-level stock and the unit market, as buyers traded space for a foothold.
“Government schemes can shave years off the deposit hurdle – they don’t make homes cheap, but they change how people get in.”
Geelong buyers advocate Tony Slack said the modelling shows people who are paying rent the benefits of deciding to buy.
“There will always be renters for whom buying a home is the furthest thing from their mind,” Mr Slack said.
Ray White chief economist Nerida Conisbee said deposits were still the main block for buyers entering the market.
“They want to live in a location that offers walkability, lifestyle and perhaps proximity to work, and if they’re young families, schools.”
But for people who are buying, they’re increasingly choosing areas where it suits their budget, which is driving demand for homes in the $600,000 to $800,000 price bracket across the region.
“When you’re buying, your budget nearly always determines where you’re going to live,” Mr Slack said.
The modelling will also be welcomed by property investors who are heavily targeting the suburbs where properties offer enticing rental yields.
“You might be thinking the returns are not great at the moment but in another five to 10 years the property is going to be positively geared,” Mr Slack said.
“I think a lot of people don’t understand that when they talk about negative gearing, but at some point in time most people want to be at least neutral or positively geared, even though there are tax advantages. People still want to get the maximum return possible.”
REA Group executive manager of economics Angus Moore said rental yields are higher in Victoria because prices have’t risen as much as other states in recent years.
“Secondly, rents have been growing relatively quickly in recent history. If that continues, rents could close the gap to mortgage repayments relatively quickly (since you’re locking in your purchase price today, and we’re assuming rates don’t move).”
Additional reporting Viva Hyde, David Bonaddio
Time taken for monthly rents to exceed monthly mortgage repayments
| Suburb | Property type | Median sale price | Monthly repayments | Monthly rent | Time for rent to exceed mortgage payments |
| Whittington | U | $415,500 | $1940 | $1733 | 2.2 years |
| Lara | U | $510,000 | $2381 | $2080 | 2.8 years |
| Norlane | U | $442000 | $2064 | $1733 | 3.8 years |
| Norlane | H | $493944 | $2306 | $1777 | 4.8 years |
| Geelong West | U | $515,000 | $2404 | $1907 | 5.1 years |
| Whittington | H | $580,000 | $2708 | $2037 | 5.4 years |
| Grovedale | U | $509,250 | $2377 | $1907 | 5.4 years |
| Corio | H | $540,000 | $2521 | $1863 | 5.8 years |
| Lara | H | $700,000 | $3268 | $2470 | 5.8 years |
| Newcomb | U | $490,000 | $2288 | $1811 | 6.0 years |
| Winchelsea | H | $640,000 | $2988 | $2080 | 6.3 years |
| Highton | U | $556,250 | $2597 | $1950 | 6.5 years |
| Newcomb | H | $605,750 | $2828 | $2071 | 6.7 years |
| Belmont | U | $570,000 | $2661 | $1950 | 7.0 years |
| Thomson | H | $576,000 | $2681 | $1950 | 7.2 years |
| Geelong | U | $615,000 | $2871 | $2037 | 7.6 years |
| Bell Park | H | $680,000 | $3175 | $2167 | 7.8 years |
| Drysdale | H | $760,000 | $3548 | $2297 | 7.9 years |
| Newtown | U | $595,000 | $2778 | $1950 | 7.9 years |
| Charlemont | H | $640,000 | $2988 | $2275 | 8.2 years |
| Grovedale | H | $700,000 | $3268 | $2297 | 8.5 years |
| Hamlyn Heights | H | $737,000 | $3441 | $2253 | 8.7 years |
| Bell Post Hill | H | $691500 | $3228 | $2167 | 8.9 years |
| Hamlyn Heights | U | $585,000 | $2731 | $1907 | 9.2 years |
| Clifton Springs | H | $680,000 | $3175 | $2123 | 9.4 years |
| Herne Hill | H | $755,000 | $3525 | $2232 | 9.5 years |
| Ocean Grove | U | $774,000 | $3613 | $2253 | 9.6 years |
| Leopold | H | $690,200 | $3222 | $2253 | 9.7 years |
| North Geelong | H | $645,000 | $3011 | $2037 | 9.8 years |
| St Albans Park | H | $667,750 | $3117 | $2080 | 9.8 years |
| East Geelong | H | $862000 | $4024 | $2340 | 10.8 years |
| Torquay | U | $895,000 | $4178 | $2513 | 11.0 years |
| Ocean Grove | H | $950,000 | $4435 | $2600 | 11.3 years |
| Jan Juc | H | $1320,000 | $6163 | $3250 | 11.8 years |
| Highton | H | $898,000 | $4192 | $2513 | 12.0 years |
| Portarlington | H | $850,000 | $3968 | $2123 | 12.5 years |
| Mount Duneed | H | $705,000 | $3291 | $2383 | 12.6 years |
| Geelong | H | $920,250 | $4296 | $2383 | 12.8 years |
| Torquay | H | $1,200,000 | $5602 | $3120 | 13.0 years |
| Waurn Ponds | H | $790,000 | $3688 | $2427 | 13.7 years |
| Anglesea | H | $1330,000 | $6209 | $2817 | 13.7 years |
| Geelong West | H | $857,500 | $4003 | $2275 | 13.8 years |
| Point Lonsdale | H | $1200,000 | $5602 | $2687 | 14.0 years |
| Barwon Heads | H | $1440,000 | $6723 | $2947 | 14.2 years |
| Manifold Heights | H | $960,000 | $4482 | $2297 | 14.9 years |
| Fyansford | H | $980,000 | $4575 | $2817 | 15.7 years |
Source: PropTrack *Assuming 80% loan-to-value on a 30-year loan at an interest rate of 5.75% (current RBA lenders rate plus recent rate rise).
Help us improve your reading experience
Got a minute? Your feedback will help us build a better experience for you.
Help us improve this page
English (US) · 