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Regional Western Australia has the highest share of suburbs where it is cheaper to buy than rent in.

This was according to CoreLogic, which showed that as of February 2023, the share of suburbs where it is cheaper to buy than rent went down to just 9.1% for houses and 16% for units.

Compared to last year, these latest figures were drastically lower — during the same time in 2022, the share of suburbs where buyers are at an advantage than renters were 30.3% for houses and 45.2% for units.

CoreLogic research director Tim Lawless said despite the double-digit gains in rents across Australia on the back of rental property shortage, record-level net overseas migration, and the return to major cities, the proportion of suburbs where it is cheaper to rent than buy has increased exponentially over the past year.

“There is no doubt the cost to service a mortgage compared to rent is keeping people in rental accommodation, adding to the extreme pressure on rental demand at a time when supply levels have not responded,” he said.

“While many tenants might see home ownership as a way of breaking out of the rent cycle, it’s just not possible for many because the cost to service a mortgage has become even more onerous in the past year with the increase in repayments outstripping the increase in rents by some margin.”

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers. To continue reading the rest of the article, read here.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
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  • $2000 for loans up to $700,000
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5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

Rent versus mortgage repayments

Over the past year, national rents increased 10.1%, equivalent to $225 per month.

During the same period, dwelling values have declined 7.9%, which took nearly $262,000 off the median value of a home nationally.

However, considering the 325bps increase in the cash rate by February, repayments increased $774 per month. Over the year, the average variable mortgage rate for owner-occupiers increased from 2.49% to 5.23%.

The suburbs where it is still cheaper to buy than rent in February are mostly located in regional areas of Australia, particularly in Western Australia.

The top 10 suburbs where it is more affordable to buy are all in Western Australia, including Baynton, Nickol, South Hedland, Newman, Millars Well, Pegs Creek, Bulgarra, Boulder, and South Boulder. These are all for houses.

The difference between rents and mortgage repayments in these 10 areas are at least $1,100 to up to $1,890.

“Suburbs where it’s cheaper to buy than rent all have the same thing in common: an affordable median value. Whether it’s units or houses, more than nine out of 10 of these suburbs have a median value under $500,000,” Mr Lawless said.

“For capital city suburbs that are cheaper to buy, more than half (52%) are located in Perth. While these suburbs might not appeal to everyone our analysis shows there are opportunities if buyers have the ability and desire to get into the market.”

On the other hand, the top 10 suburbs where it is cheaper to rent are all in Sydney, including Vaucluse, Bellevue Hill, Rose Bay, Dover Heights, Bronte, Greenwich, Northbridge, Strathfield, East Lindfield, Woollahra.

In these suburbs, the difference between mortgage repayments and rents is at least $11,400 and as high as $26,400.

Share of suburbs where it is cheaper to service a mortgage than pay rent

Location

Houses

Units

Cheaper to buy (%)

Cheaper to rent (%)

Cheaper to buy (%)

Cheaper to rent (%)

ACT

0

100

4.7

95.3

Adelaide

1.9

98.1

10.4

89.6

Brisbane

2.2

97.8

22.1

77.9

Darwin

48.4

51.6

93.3

6.7

Hobart

2.4

97.6

0

100

Melbourne

0

100

1.7

98.3

Perth

12.1

87.9

69.2

30.8

Sydney

0

100

0

100

Regional NSW

4.5

95.5

5.9

94.1

Regional Qld

35.8

64.2

43.2

56.8

Regional SA

34.3

65.7

0

100

Regional Tas

5.1

94.9

0

100

Regional Vic

1.8

98.2

2.3

97.7

Regional WA

59.4

40.6

100

0

National

9.1

90.9

15.8

84.2

The values above were based on monthly median rental values and mortgage repayments for a loan with a principal amount of 90% of the median value.

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Photo by studioroman on Canva.