Where it’s cheaper to buy than rent in South Australia

There aren’t many places in SA where it’s cheaper to buy than rent. Find out where they all are here, and how much you could save by renting in some areas. Here’s a hint: it’s thousands a month.

While it used to be cheaper to buy a house than rent in many suburbs, new data reveals that is no longer the case anywhere in metropolitan Adelaide, and there are now just three suburbs where you’re better off paying off your own unit than someone else’s.

According to Compare the Market, buyers can save, on average, $235.13 a month by buying a city unit or apartment over renting one, with monthly repayments on a median-priced home coming in at $2329.25 as opposed to the $2564.38 you would be paying to rent a median-priced unit or apartment.

Those looking to escape the rental market can also save $209.10 by buying a Salisbury unit than renting one, while those buying a Mawson Lakes unit can save themselves $10.44 per month by buying.

The savings were far greater for those looking to buy a house in rural SA rather than renting one.

Renters in Solomontown, near Port Pirie, stand to save $612.50 per month by switching to owning, with monthly repayments of $1000.20 significantly cheaper than the $1612.69 they would be paying in rent.

Compare the Market’s property expert Andrew Winter said rising interest rates and soaring property prices meant most buyers coming into the market would spend more on their mortgage repayments than they would on their monthly rent.

“But owning a property still has advantages if you have a deposit saved and can afford to meet the repayments,” he said.

Compare the Market’s Andrew Winter. Image: Luke Marsden.

“In the vast majority of cases, if you hold on for a decade or two, you’ll reap rewards in equity.”

On the flip side, the data shows just how much you can save by renting your dream lifestyle as opposed to buying it, with those renting a median-priced St Peters home for $823 per week, or $366.07 per month, saving $6167.37 on the $9733.45 they would be spending on mortgage repayments on a $2.0315m property.

Walkerville renters saved $5393.88 per month by renting a home they would effectively be paying $8905.07 in repayments on for just $3511.19 per month.

Unit rentals offered more tempered savings, with Parkside tenants paying $996.67 less per month than they would be if they were paying a mortgage.

Tenants in Somerton Park, Glenelg South, Glenelg and Unley all pay more than $900 less per month than they would had they bought.

The research calculated monthly repayment over a 20per cent-deposit 30-year loan term with no fees and a variable rate of 5.99 per cent.

Cullinan Property Management agent Jo Cullinan said she recommended tenants spend no more than one third of their income on rent, and while you could save money by renting their dream lifestyle, a lot of the time is was not so much a matter of choice, but necessity.

“Many have been forced to become a tenant due to the tight sales market,” she said.

“In some cases, it is the only viable option as house prices soar – deposits to purchase a home are now almost unattainable to the younger person.

Property manager Jo Cullinan with a luxury listing available for rent on Eighth Ave in St Peters. Picture: Naomi Jellicoe

“There are some people who just want the status of just living in these prestigious areas and they are high-earning tenants who can afford to do this – they are used to living in these locations and do not want to change their lifestyle.”

Ms Cullinan has been working in real estate for about 30 years and said she had never seen the market so tight.

“There are no bargains to be had in Adelaide anymore in any suburb,” she said.

MORE NEWS:

Homebuyer hell: Huge ask for new school leavers to save for a house

Ultimate buyers guide to almost 500 SA schools

Luxe waterfront homes coming to Taperoo

Legendary chocolate maker’s estate hits market

Mapped: Find out the average rental price in your suburb

Valuer-General’s April figures: What your suburb is worth