Think rent money is dead money? Think again.
New Finder research shows of the 516 SA suburbs or towns it has house or unit data for, it is cheaper to pay a mortgage than a weekly rent in just 25 of them.
According to the data, the biggest savings to be made by renting can be found in SA’s most prestigious suburbs, with Medindie, on Adelaide’s northern fringe leading the pack.
Here the median rent – on a $3.365m home – is $1315 per week, whereas mortgage repayments sit at $3535.
Rent is a better option in many suburbs as house prices are on the move. Pic Getty Images
This is a saving of $2220 a week, for exactly the same lifestyle.
Unley Park renters saw similar savings – here you’re $2075 a week better off renting, while in Toorak Gardens you’d be paying $2013 more in mortgage repayments than weekly rent.
Consumer research head at Finder Graham Cooke said it was tempting to look at the suburbs where a mortgage is cheaper than rent and assume the property ladder is in reach, but for the majority of suburbs, renting remains the cheaper option.
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“Even in the rare pockets where the maths is flipped, the calculations don’t account for the deposit you’re required to save, stamp duty, and all the other fees that go into buying a home,” he said.
“The reality is that for most young Aussies, particularly those in capital cities, the dream of home ownership is being squeezed from both ends.
“Negative gearing assures that the gap between house prices and rental costs will remain for the foreseeable future.”
He said low deposit schemes have been touted as a solution, but they also come with a hidden sting: by borrowing more, you could face higher interest costs that would disqualify around half of the ‘affordable’ suburbs found in this analysis.
Graham Cooke, head of consumer research at Finder.
“We have reached the point where the sheer cost of entry, combined with the rising cost of debt, keeps the property ladder largely out of reach for many Australians,” he said.
For those looking to get off the rent roundabout, the biggest savings to be made are in Tonsley, in Adelaide’s south, where weekly repayments on a median-priced unit are $431, as opposed to their median-priced rent of $625 – a saving of a whopping $194 a week.
All of the remaining areas where it is cheaper to buy than rent are in regional South Australia, with the next-biggest saving Coober Pedy houses where mortgage repayments – of just $84 a week – are $179 cheaper than rents.
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Peterborough, Roxby Downs, and Port Pirie West houses, and Whyalla Norrie units, all offer weekly savings of more than $100 a week to those who buy over renting.
Ray White Marion’s Samuel Paton said Tonsley is a seldom-discussed gem that should be on a buyer’s list if they want a convenient lifestyle at a reasonable pricepoint.
“It’s a fantastic choice for first homebuyers wanting to crack into the market and an even better choice for investors,” he said.
Ray White Marion agent Samuel Paton. Supplied
“Demand for rentals in the area is strong, vacancy rates are almost zero and the yields are brilliant.”
The report assumed a loan term of 30 years, a deposit size of 20 per cent and an average outstanding owner-occupied variable rate of 5.52 per cent paid monthly.
– with Aidan Devine
English (US) · 