Owning and buying a property could now be more affordable than the median price of rent in a number of Australian suburbs, after the national median surpassed $600 a week.
New Compare the Market analysis shows mortgage repayments on a $400,000 loan, at an interest rate of 5.99%, could be as low as $552.
While the vast majority of places are cheaper to rent than buy, there are pockets of opportunity – particularly when it comes to units.
Melbourne suburbs that could be cheaper to buy
| Suburb | Median monthly rental value | Median unit value | Monthly repayments (with 20% deposit) | Difference |
| Carlton | $2,349.14 | $352,364 | $1,688.27 | $660.87 |
| Melbourne | $2,886.98 | $481,563 | $2,307.30 | $579.68 |
| Notting Hill | $2,320.83 | $374,748 | $1,795.51 | $525.32 |
| Travancore | $2,321.26 | $419,102 | $2,008.03 | $313.23 |
| Box Hill | $2,531.25 | $467,634 | $2,240.56 | $290.69 |
| Source: Compare the Market, monthly repayment calculations assume a 30-year loan term with no fees, with a variable rate of 5.99%. Median unit values and rental price were sourced from CoreLogic data. | ||||
Brisbane suburbs that could be cheaper to buy
| Suburb | Median monthly rental value | Median unit value | Monthly repayments (with 20% deposit) | Difference |
| Spring Hill | $2,691.04 | $487,735 | $2,336.87 | $354.17 |
| Goodna | $1,852.76 | $324,868 | $1,556.53 | $296.23 |
| Fortitude Valley | $2,736.59 | $512,964 | $2,457.74 | $278.85 |
| Bundamba | $1,942.42 | $348,028 | $1,667.49 | $274.93 |
| Bowen Hills | $2,644.24 | $503,746 | $2,413.58 | $230.66 |
| Source: Compare the Market, monthly repayment calculations assume a 30-year loan term with no fees, with a variable rate of 5.99%. Median unit values and rental price were sourced from CoreLogic data. | ||||
Sydney suburbs that could be cheaper to buy
| Suburb | Median monthly rental value | Median unit value | Monthly repayments (with 20% deposit) | Difference |
| Mascot | $4,267.51 | $843,471 | $4,041.29 | $226.22 |
| Regents Park | $2,317.08 | $436,491 | $2,091.34 | $225.74 |
| Berkeley Vale | $1,941.03 | $387,917 | $1,858.61 | $82.42 |
| Auburn | $2,689.35 | $544,316 | $2,607.96 | $81.39 |
| Bankstown | $2,512.51 | $510,078 | $2,443.92 | $68.59 |
| Source: Compare the Market, monthly repayment calculations assume a 30-year loan term with no fees, with a variable rate of 5.99%. Median unit values and rental price were sourced from CoreLogic data. | ||||
Compare the Market property expert Andrew Winter said rising interest rates and soaring property prices mean that most buyers coming into the market today will spend more on their mortgage repayments than they would on their monthly rent.
“Owning a property still has advantages if you have a deposit saved and can afford to meet the repayments,” Mr Winter said.
“In the vast majority of cases, if you hold on for a decade or two, you’ll likely reap rewards in equity.
“The median house and unit value in Australia increased 72% in the decade to 2022 – putting hundreds of thousands of property owners on the path to financial freedom.
“If you’re lucky, you might be able to find a property where the distance between rental payments and mortgage repayments is close. But in many cases, you’ll need to stretch your budget a bit further to make it work.”
Depending on which state or territory you live in, you might be eligible for the first home buyer grant, which is currently between $10,000 and $15,000.
The Federal Government also offers the First Home Guarantee which lets 35,000 eligible Australians purchase their first home with a deposit as small as 5%, subject to eligibility requirements.
While stamp duty can be expensive, many of the country’s states and territories offer stamp duty concessions and discounts for first home buyers as well – this could save you thousands of dollars.
Mr Winter said comparing lenders and choosing a competitive home loan rate can make a big difference in mortgage affordability.
“Consider stress testing your budget against higher interest rates,” Mr Winter said.
“Banks and lenders will generally apply a 3% serviceability buffer for you but it’s important to make sure that you could still afford your repayments should your circumstances change, if you lost your job, or if you ever had a financial emergency.”
| Property purchase price | 20% deposit |
| $400,000 | $80,000 |
| $500,000 | $100,000 |
| $600,000 | $120,000 |
| $700,000 | $140,000 |
To find out more or to see if you can qualify for pre-approval, head to Compare the Market’s website.
For more information, please contact:
Natasha Innes | 0416 705 514 | [email protected]
Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, travel and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.
