Rent versus buy: How suburb numbers stack up across Qld

Shock new figures show home ownership even further out of reach of many Queenslanders, with five out of six suburbs cheaper to rent in than buy, but there’s some hope. SEARCH SUBURB BREAKDOWNS

Shock new figures show home ownership is even further out of reach of many Queenslanders, with five out of six suburbs cheaper to rent in than buy despite record rental price rises.

Latest analysis from Compare The Market found an overwhelming surge in suburbs where rent has escalated – costing as much as $6,000 a month in the worst-hit suburb Broadbeach Waters on the Gold Coast and over $4,800 in Brisbane’s most expensive area Bulimba.

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Despite that, more than 500 suburbs were cheaper to rent in than buy a home – thanks to record home prices pushing mortgage repayments out to as much as double monthly rent.

In 185 suburbs across Queensland, both houses and units were considered cheaper to rent than buy because of high mortgage costs – though there were some bright spots for unit buyers in 15 Greater Brisbane suburbs that were marked as better to buy in now.

These included units in inner city suburbs like Spring Hill – where mortgage repayments were almost $395 a month less than rent, Fortitude Valley and Bowen Hills (over $230 difference) and expanding to outer areas like Goodna and Bundamba (almost $300 less).

The data also found that in some suburbs rent versus buy costs were close enough to warrant renters making the leap into home ownership if they could – certainly before prices escalate any further.

Greater Brisbane suburbs Russell Island ($1,839.98 to rent versus $1,929.78 to buy) and Macleay Island ($1,963.46 versus $2,121.52) were among those Compare the Market found close enough to make the leap.

Real estate guru Andrew Winter is Compare The Market’s property expert. Picture: Luke Marsden.

Of the 100 or so that have come through as being cheaper to buy houses in, most are across mining and resource-driven areas where rents have skyrocketed including Collinsville, Dysart and Blackwater where rents are double mortgage repayments sitting around $1,600 to $1,800.

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”.

Mr Winter said “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.”

“Comparing lenders and choosing a competitive home loan rate can make a big difference in mortgage affordability, especially now that the RBA isn’t expected to move on the cash rate for some time.”

Online moving specialists Muval has an Australia-first real-time migration model out called MuveRank – produced with geographers at the University of Queensland – which is seeing some reversal in Covid-19 trends now.

Muval CEO James Morrell said Sunshine Coast, Cairns and Wide Bay were all in the national top ten on MuveRank, seeing a rise in people moving in and out.

With households under increased financial pressure, Muval is finding many people are being forced to re-evaluate and move into areas that are either more affordable or to be closer to family and friends for support and shared costs.

Muval CEO James Morrell. Picture: Zak Simmonds

University of Queensland geographer Dr Elin Charles-Edwards said Queensland was entering a new phase in its population patterns.

“MuveRank shows that our cities are returning to normal after years of pandemic volatility, as well as some signals suggesting a peri-urban population shift to regional centres near a city such as the Tweed, Central Coast and Sunshine Coast”.

“Historically, we tend to see a decline in internal migration during economic downturns and what we might be seeing is a new phase of trapped populations who are mortgage prisoners, or who are being forced out of unaffordable metropolitan areas but still need to be close enough for work commitments.”

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Mr Winter said renters and homeowners should consider stress testing their budget against higher interest rates to know where they stand.

“Banks and lenders will generally apply a 3 per cent 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.”

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